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《Journal of South China Agricultural University》 2002-01
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Growth and Poverty Effects of Government Spending in Rural China

FAN Shenggen1,ZHANG Linxiu2,ZHANG Xiaobo1 (1International Food Policy Research Institute, Washington D.C., U.S.A.; 2. Agricultural Policy Research Center, Chinese Academy of Sciences, Beijing 100101, China)  
This paper develops an analytical framework to assess the impact of government spending on both growth and reduction in poverty. Using Chinese provincial-level data for 1970-97, the paper establishes a simultaneous equations model to estimate the effects of different types of government expenditure. The model not only ranks the marginal effects of government spending on growth and poverty, but also tracks various channels of spending and their effectiveness. The latter is important because it enables policymakers to focus on strengthening the weak links in the poverty-reduction chain. The results show that government spending, such as agricultural RD, irrigation, rural education, and infrastructure contributed not only to agricultural production growth, but also to reduction of rural poverty. But variations in the magnitude of the effects are large among different types of spending, as well as across regions. The results imply that there is a large potential to gain more growth and poverty reduction if the government can optimize its budget allocations among different sectors and across regions.
【CateGory Index】: F323.9
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【References】
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