Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors

This paper uses a novel loan-level dataset covering lending by official creditors to developing country governments to construct an instrument for government spending. These loans typically finance multi-year spending projects, with disbursements linked to the stages of project implementation. The i...

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Main Author:	Kraay, Aart
Format:	Journal Article
Language:	en_US
Published:	American Economic Association 2013
Subjects:	government spending multipliers fiscal policy
Online Access:	http://hdl.handle.net/10986/16313

id	okr-10986-16313
recordtype	oai_dc
spelling	okr-10986-163132021-04-23T14:03:28Z Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors Kraay, Aart government spending multipliers fiscal policy This paper uses a novel loan-level dataset covering lending by official creditors to developing country governments to construct an instrument for government spending. These loans typically finance multi-year spending projects, with disbursements linked to the stages of project implementation. The identification strategy exploits the long lags between approval and eventual disbursement of these loans to isolate a predetermined component of public spending associated with past loan approval decisions taken before the realization of contemporaneous shocks. In a large sample of 102 developing countries over the period 1970-2010, the one-year spending multiplier is reasonably-precisely estimated to be around 0.4. 2013-11-25T19:27:41Z 2013-11-25T19:27:41Z 2014-10 Journal Article American Economic Journal: Macroeconomics http://hdl.handle.net/10986/16313 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo American Economic Association American Economic Association Publications & Research :: Journal Article Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	government spending multipliers fiscal policy
spellingShingle	government spending multipliers fiscal policy Kraay, Aart Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors
description	This paper uses a novel loan-level dataset covering lending by official creditors to developing country governments to construct an instrument for government spending. These loans typically finance multi-year spending projects, with disbursements linked to the stages of project implementation. The identification strategy exploits the long lags between approval and eventual disbursement of these loans to isolate a predetermined component of public spending associated with past loan approval decisions taken before the realization of contemporaneous shocks. In a large sample of 102 developing countries over the period 1970-2010, the one-year spending multiplier is reasonably-precisely estimated to be around 0.4.
format	Journal Article
author	Kraay, Aart
author_facet	Kraay, Aart
author_sort	Kraay, Aart
title	Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors
title_short	Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors
title_full	Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors
title_fullStr	Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors
title_full_unstemmed	Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors
title_sort	government spending multipliers in developing countries : evidence from lending by official creditors
publisher	American Economic Association
publishDate	2013
url	http://hdl.handle.net/10986/16313
_version_	1764432811409801216

Government Spending Multipliers in Developing Countries : Evidence from Lending by Official Creditors

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