Previous studies have established a negative relationship between total government spending and entrepreneurship activity. However, the relationship between the composition of government spending and entrepreneurship has been woefully under-researched. We fill this gap by empirically exploring...

In the long run tax effort, we argue, determines the effectiveness of aid, and this relationship operates simultaneously with the negative link in the opposite direction observed by Bräutigam and Knack (2004) and others. Tax effort and the ability of the state to diversify its taxation...

This paper studies the cyclical behavior of public spending on health and education in 145 countries during 1987–2007. It finds that spending on education and health is procyclical in developing countries and acyclical in developed countries. In addition, education and health expenditures...

Policymakers in oil-exporting countries confront the question of how to allocate oil revenues among consumption, saving, and investment in the face of high income volatility. We study this allocation problem in a precautionary saving and investment model under uncertainty. Consistent with data...

This paper investigates economic and institutional constraints to fiscal policy implementation in sub-Saharan Africa. We find that planned fiscal adjustments or expansions are less likely to be implemented the larger they are, the more fragile the rule of law in the country, and the weaker the...

This paper investigates how three major political conditions—political constraint (imposed by veto players), government partisanship, and elections—have influenced the government responses to financial crises in 98 developing countries over the period 1976–2004. We find that governments...