Does Allocation of Public Spending Matter in Poverty Reduction? Evidence from Thailand*

Abstract

The present paper uses a panel dataset to estimate the marginal returns to different types of government expenditure on agricultural growth and rural poverty reduction in Thailand. The study finds that additional government spending on agricultural research provides the largest return in terms of agricultural productivity and has the second largest impact on rural poverty reduction. Increased investment in rural electrification has the largest poverty reduction impact, mainly through improved nonfarm employment. Rural education has the third largest impact on both productivity and poverty reduction. Irrigation has a positive impact on agricultural productivity, but regional variation is considerable. Government spending on rural roads has no significant impact on agricultural productivity and its poverty reduction impact ranks last among all investment alternatives considered. Additional investment in the Northeast Region has a greater impact on poverty reduction than in other regions.

Earmarking Tax for Indonesia's Economic Growth through the Education and Health Sector in the Long and Short Term Period

“…The positive externalities related to human capital accumulation and the contrast among social and private education frequently cannot be solved with an "invisible hand" as they require government intervention. Several studies have proposed that government spending on education and health improve economic growth (Dissou, Didic, & Yakautsava, 2016;Fan, Yu, & Jitsuchon, 2008;Glomm & Ravikumar, 1997, 1998Sequeira & Martins, 2008;Widodo et al, 1999).…”

Evidence on Key Policies for African Agricultural Growth

“…In this respect, it is important to consider the disadvantages and drawbacks associated with input subsidies. As outlined in Brooks (2012) the arguments against subsidies include the following: (1) Subsidies may be ineffective in raising use of inputs and increasing yields after they are removed; (2) heavy subsidies on inputs potentially distort the relative costs of factors, leading to inefficient allocation of inputs, with the subsidized inputs substitute for other factors; (3) subsidies intended to benefit specified groups of farmers, or to stimulate particular crops, may be less effective than intended as leakages occur; (4) subsidy programs may be implemented in ways that repress the development of private supply of inputs by delivering inputs through state agencies and bypassing nascent local input dealers (Bumb, Johnson, and Fuentes 2011;Fan, Yu, and Jitsuchon 2008); (5) in the absence of effective targeting, input subsidies are likely to benefit larger farmers, whose use of inputs is highest, and may fail to reach the poorest and most vulnerable households (Mason and Ricker-Gilbert 2012); and (6) when subsidized inputs dominate the supply of a particular input, then subsidies may become closely linked to government budget cycles or to electoral cycles with pronounced swings in availability so that supplies, whether or not they are subsidized, may not be regular, reliable, and timely.…”

“…Agricultural development can have significant welfare effects given that the majority of poor households in Sub-Saharan Africa (SSA) depend on agriculture for their income and food. Recent work examining the potential impacts of agricultural growth on poverty reduction in SSA has found that agricultural growth has the potential to be more pro-poor than industrial growth (Diao, Hazell et al 2010, Diao, Thurlow et al 2012Christiaensen, Demery, and Kuhl 2011;de Janvry and Sadoulet 2010) and that investments in the agricultural sector bear high returns (Mogues and Benin 2012;Fan, Mogues, and Benin 2009;Fan, Hazell, and Thorat 1999;Fan, Yu, and Jitsuchon 2008). However, SSA has thus far largely not been able to leverage the potential of agriculture.…”

Poverty, Inequality and Rising Growth in Nigeria: Further Empirical Evidence

“…Thus, in order to empirically capture the individual effects of GDP growth rate (Gdpgr), literacy rate (Lit), government expenditure on education (Gxpe) and government expenditure on health (Gxph) on per capita income (Pci), following Fan (2008aFan ( , 2008b and Badiane and Ulimwengu (2009) on the link among poverty, income distribution, literacy rate, education and health expenditures, the re-specification of (1) in the functional and the natural log linear transformation forms are stated below respectively in (2) and (3) www.ccsenet.org/ijef International Journal of Economics and Finance Vol. 7, No.…”