This article aims at identifying the determinants of government expenditures of developing countries by placing emphasis on the political institutions and governance variables, which have not been addressed so much in the previous literature. Using a panel data analysis for 97 developing countries from the period 1984 to 2004, this study finds evidence that controlling for economic, social, and demographical factors, political institutional and governance variables significantly influence the consumption expenditure in developing countries. Political institutional variables such as the type of political ruling and political power in the parliament positively influence consumption expenditure; on the contrary, governance variables such as corruption influence negatively. Furthermore, we find that autocratic governments with military ruling are not particularly accommodative toward consumption expenditures as the public spending significantly shrinks under military dictatorship compared with other forms of governance. In order to check consistency of our findings, we ran alternative specifications as well as conducted extreme bound tests. Our results largely survived these tests showing robustness of our findings. (JEL E01, E02, E61, E62, H2, H4, H5, H6, O11, O5)"> This article aims at identifying the determinants of government expenditures of developing countries by placing emphasis on the political institutions and governance variables, which have not been addressed so much in the previous literature. Using a panel data analysis for 97 developing countries from the period 1984 to 2004, this study finds evidence that controlling for economic, social, and demographical factors, political institutional and governance variables significantly influence the consumption expenditure in developing countries. Political institutional variables such as the type of political ruling and political power in the parliament positively influence consumption expenditure; on the contrary, governance variables such as corruption influence negatively. Furthermore, we find that autocratic governments with military ruling are not particularly accommodative toward consumption expenditures as the public spending significantly shrinks under military dictatorship compared with other forms of governance. In order to check consistency of our findings, we ran alternative specifications as well as conducted extreme bound tests. Our results largely survived these tests showing robustness of our findings. (JEL E01, E02, E61, E62, H2, H4, H5, H6, O11, O5)"> This article aims at identifying the determinants of government expenditures of developing countries by placing emphasis on the political institutions and governance variables,">
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Political Institutions, Governance, And Consumption Expenditure In Developing Countries: A Panel Data Analysis

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type="main"> This article aims at identifying the determinants of government expenditures of developing countries by placing emphasis on the political institutions and governance variables, which have not been addressed so much in the previous literature. Using a panel data analysis for 97 developing countries from the period 1984 to 2004, this study finds evidence that controlling for economic, social, and demographical factors, political institutional and governance variables significantly influence the consumption expenditure in developing countries. Political institutional variables such as the type of political ruling and political power in the parliament positively influence consumption expenditure; on the contrary, governance variables such as corruption influence negatively. Furthermore, we find that autocratic governments with military ruling are not particularly accommodative toward consumption expenditures as the public spending significantly shrinks under military dictatorship compared with other forms of governance. In order to check consistency of our findings, we ran alternative specifications as well as conducted extreme bound tests. Our results largely survived these tests showing robustness of our findings. (JEL E01, E02, E61, E62, H2, H4, H5, H6, O11, O5)

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  • Abu S. Shonchoy, 2016. "Political Institutions, Governance, And Consumption Expenditure In Developing Countries: A Panel Data Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 34(4), pages 710-728, October.
    • Handle: RePEc:bla:coecpo:v:34:y:2016:i:4:p:710-728
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    2. Saima Nawaz & Idrees Khawaja, 2020. "The Impact of Political Regime and Institutions on Government Size in Middle-Income Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(2), pages 199-220.

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    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H4 - Public Economics - - Publicly Provided Goods
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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