This paper uses a novel loan-level dataset covering lending by official creditors to developing country governments to construct an instrument for public spending that can be used to estimate government spending multipliers. Loans from official creditors (primarily multilateral development banks...

To explain the fact that government spending and tax policy are procyclical in emerging and developing countries, we develop a model for the joint behavior of optimal tax rates and government spending over the business cycle. Our set-up relies on financial frictions, which have been shown to be...

We contribute to the debate on the macroeconomic effects of fiscal stimuli by showing that the impact of government expenditure shocks depends crucially on key country characteristics, such as the level of development, exchange rate regime, openness to trade, and public indebtedness. Based on a...

It is well-known by now that government spending has typically been countercyclical in industrial countries and procyclical in developing economies. Most of this literature has focused on analyzing aggregate government spending or discretionary spending categories such as government consumption...

This paper examines the micro and macro correlates of aid project outcomes in a sample of 3,821 World Bank projects and 1,342 Asian Development Bank projects. Project outcomes vary much more within countries than between countries: country-level characteristics explain only 10–25 percent of...

The authors examine the empirical evidence in support of the poverty trap view of underdevelopment. They calibrate simple aggregate growth models in which poverty traps can arise due to either low saving or low technology at low levels of development. They then use these models to assess the...

Growth is pro-poor if the poverty measure of interest falls. According to this definition there are three potential sources of pro-poor growth: (1) a high rate of growth of average incomes; (2) a high sensitivity of poverty to growth in average incomes; and (3) a poverty-reducing pattern of...