Table 1. Summary of Selected Empirical Studies: Public Expenditure and Poverty

|Country(ies)|Period|Unit of<br>Analysis|Author|Analytical<br>Method|Expenditure<br>Components|Summary of<br>Empirical Findings|
|---|---|---|---|---|---|---|
|Bolivia|1996|Municipalities|Ajwad and Wodon,<br>2001|Marginal benefit<br>incidence analysis|Education and basic infrastructure<br>services|The marginal benefit incidence is<br>higher for the poor than for the non-<br>poor in education, but lower in the<br>case of access to infrastructure<br>services|
|China|1970-1997|Province|Fan and Hazell, 2001|Regression analysis<br>(system of equations)|Public investments in rural areas<br>(R&D, roads, irrigation, education,<br>electricity, telephone)|.<br>R&D and education have the largest<br>poverty and productivity impact. For<br>all public investments, less-favored<br>areas provide the highest returns.|
|Cross-<br>country (20)|1976-1999|Households|Foster and Szekely,<br>2001|Regression analysis<br>(various techniques)|Government consumption|Government consumption as a share<br>of GDP has a negligible effect on<br>general means but is associated with<br>income gains for the poorest<br>idiidl|
|Cross-<br>country (92)|1950-99|Country|Dollar and Kraay,<br>2002|Regression analysis<br>(system of equations)|Overall government consumption,<br>social spending|nvuas.<br>Overall government spending<br>negatively related to poverty, but<br>health and education spending are<br>insignificant.|
|Ethiopia|2003-2015|Country|Agenor, Bayaktar, and<br>El Aynaoui, 2004|<br>Aggregate<br>macroframework|Infrastructure, health, and education|Simulated decrease in consumption<br>spending and reallocation into<br>investment spending (with higher<br>increase in infrastructure relative to<br>education and health) have modest<br>|
|Ghana|1999|Country|Dabla-Norris and<br>Matovu, 2002|Dynamic CGE|Primary, secondary, and tertiary<br>education, and public infrastructure|effects on poverty.<br>Increasing primary and secondary<br>education has significant<br>macroeconomic and poverty reduction<br>benefits, even if these come at the<br>expense of infrastructure investment.|
|India|1970-1995|District|Fan and Hazell, 2001|Regression analysis<br>(system of equations)|Public investments in rural areas<br>(HYV, roads, canal irrigation,<br>education, electrification)|Roads have the largest poverty and<br>productivity impact. For all public<br>investments, less-favored areas<br>provide the highest returns.|
|India|1957-1997|States|Jha, Biswal, and<br>Biswal, 2001|Regression analysis<br>(panel regression)|Education, health, and development<br>expenditures (poverty eradication<br>programs, rural sector development,<br>and infrastructure)|Education, health and development<br>expenditures reduce poverty. In<br>particular, expenditure on higher,<br>university, technical, adult and<br>vocational educations is more<br>effective, compared to elementary and<br>secondary education|
|Sub-Saharan<br>Africa|1998-2015|Country|Lofgren and<br>Robinson, 2004|Dynamic CGE|Agriculture, health, education,<br>transport-communications, social<br>security, defense, and other|.<br>Increased expenditures on agriculture<br>and transportation and<br>communications generate modest<br>economic growth. Increased<br>investment in health leads to more<br>rapid growth and significant poverty<br>reduction.|
|Tanzania|1992|Country|Jung and Thorbecke,<br>2003|CGE|Education and investment|Well-targeted education expenditures<br>can be effective for poverty<br>alleviation. To maximize benefits,<br>education spending needs to be<br>complemented by sufficient public<br>investment.|

Sources: As indicated.

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