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| PREM Notes |
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This
note series is intended to summarize
good practice and key policy findings
on Economic Policy, Gender, Governance
and Public Sector Reform, Poverty and Trade.
If you are interested in writing a PREM
note, please refer to the guidelines. |
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Fiscal Policy for Growth
PREM
Note 131
The very minimum that a government is expected to do nowadays in any
country is to remove or cut down the obstacles to economic growth met by
the private sector and, much more frequently, it is deemed to have the task of striving for growth in a positive manner both by example and by precept.A.R. Prest (1972), Public Finance in Undeveloped Countries, p. 17
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On the Marriage between Public Spending and Growth: What Else Do We Know?
PREM
Note 130
While there are strong theoretical arguments for ways in which public spending influences growth, robust empirical links have been difficult to establish. More recently, many of the methodological problems that plagued the earlier literature have been overcome and interesting policy lessons drawn. The number of studies of developing countries using these new approaches is still limited, due to data scarcity and other comparability issues, but overall findings from the new literature are relevant for developing country policy makers and also open new venues for future research. The objective of this note is to present these new empirical results together with the methodological improvements that support them, and to outline some of the issues that need deeper analysis and empirical study, particularly in developing countries.
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Linking Fiscal Policy and Growth in PER Reports: An Operational Framework for Low-Income
PREM
Note 129
Public expenditure reviews (PERs) could be a key analytical tool in policy dialogue and World Bank financial support (normally under Development Policy Loans) to public finance reforms. However, there is a widely held perceptions that some PERs are analytically weak when it comes to linking fiscal policy choices and their economic growth implications.
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