Impact of overnment spending, debt, and growth on poverty: a cross-country analysis
Date
2014-04
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Abstract
This paper discusses the empirical relationship of poverty and external debt and analyzes how government spending and economic growth links both variables. Data from the World Bank
and IFPRI was used to create a panel data of nine countries from South East Asia and South Asia from the year 1983 to 20 l 0. The results of the study prove that debt does have a negative
impact on poverty. This negative impact can be explained by the inverse relationship of the debt service ratio and government spending as well as external debt and growth. Proper use and
allocation of resources such as investment on human capital will lessen the debt burden and promote inclusive growth which will then lead to poverty reduction.
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Keywords
Government spending, Government debt, Poverty