BACKGROUND Government health care spending (GHS) is of increasing importance to child health. Our study determined the relationship between reductions in GHS and child mortality rates in high- and low-income countries. METHODS The authors used comparative country-level data for 176 countries covering the years 1981 to 2010, obtained from the World Bank and the Institute for Health Metrics and...

Recent empirical work finds that government spending shocks cause aggregate consumption to increase over the business cycle, contrary to the predictions of Neoclassical and New Keynesian models. This paper proposes a mechanism to account for the consumption increase that builds on the framework of imperfect information in Lucas (1972) and Lorenzoni (2009). In my model, owners of firms targeted ...

We consider public-private partnerships, in which a public official selects a project that is then developed and operated by a private contractor. We derive optimal public accounting rules when the official's choice among projects is biased by ideology or social ties or because of pandering to special interests. We give particular emphasis to how the rules should constrain the official’s incent...

Joint modelling of fiscal and monetary policies should elucidate on their interaction. We estimate a large parsimonious structural vector equilibrium correction model (PSVECM) to analyse the dynamics of eight variables from the US economy. Shocks to fiscal and monetary variables reveal interesting observations, with the results broadly in agreement with economic theory. A shock to only governme...

This paper investigates the effects of government spending on the real exchange rate and the trade balance in the US using a new VAR identification procedure based on spending forecast revisions. I find that the real exchange rate appreciates and the trade balance deteriorates after a government spending shock, although the effects are quantitatively small. The findings broadly match the theore...

The conventional wisdom in public opinion research suggests that the white public views government spending as a single race-coded issue. This article develops an alternative theory that rests on two propositions. First, the white public sees government spending not as a single issue, but rather, as two distinct issues: spending on the deserving poor and spending on the undeserving poor. Second...

This study examines the relationship between types of government and level of public spending. There are two competing perspectives about the consequences of coalition governments for the size of public expenditures. The most common argument is that government spending increases under coalition governments, compared with one-party governments. Another line of thought contends that coalition gov...

This paper considers an endogenous growth model with productive government spending in which overlapping generations of agents vote sequentially on policy. With sequential majority voting, there is a multiplicity of politico-economic equilibria originating from self-fulfilling policy expectations. Some of these equilibria are Pareto-inefficient and there are endogenous cycles. A constitutional ...

When racial groups differ in terms of their political sensitivity—the propensity of group members to change their vote based on changes in redistribution promised by a candidate—the racial composition of a political jurisdiction affects redistributive policy even when preferences are correlated only with income. Furthermore, the extent to which race and class are cross-cutting is important. Alt...

This paper examines under what conditions fiscal policy in the form of government spending should contribute to macroeconomic stabilisation. To this end optimal fiscal targeting rules minimising the microfounded social loss are examined in the following settings. Firstly, for the benchmark New Keynesian model, where monetary policy is unconstrained, a neutrality result for fiscal obtains: fisca...