The distributional effects of government spending shocks in developing economies

We construct unanticipated government spending shocks for 103 developing countries from 1990 to 2015 and study their effects on income distribution. find that fiscal consolidations lead a long-lasting increase in inequality, while expansions lower inequality. The results are robust several measures of distribution size the shocks, an alternative identification strategy, across recessions country groups (low-income vs. emerging markets). An additional contribution paper is computation medium-term inequality multiplier. This average about 1 our sample, meaning cumulative decrease 1% gross domestic product over 5 years associated with Gini coefficient same period percentage point. multiplier larger total expenditure than public investment consumption (with former having effect), likely due redistributive role transfers. Finally, we (unanticipated) poverty.