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Public spending and inclusive growth: A cross-country empirical analysis

Md. Gazi Salah Uddin et al.

Journal of International Money and Finance2026https://doi.org/10.1016/j.jimonfin.2026.103528article
AJG 3ABDC A
Weight
0.50

Abstract

We investigate the effects of different components of government spending on inclusive growth. More specifically, we consider the inclusive impact of public spending on environmental protection, health, education, housing, and social protection, all of which can conceivably promote inclusive growth. For our empirical analysis, we apply panel regressions and local projections to a comprehensive database of 191 countries between 1980 and 2023. Our evidence indicates that equity-promoting government spending reduces income inequality, as measured by the Gini index, and improves human development indicators. Moreover, our analysis reveals that poorer households benefit disproportionately, suggesting that targeted fiscal expenditures can promote equity. Notably, the inclusive effects are most pronounced in advanced economies, where robust fiscal frameworks support and amplify such effects. In contrast, emerging and developing economies experience more modest gains. Overall, the findings highlight the importance of well-designed public spending programs for equitable growth. Finally, we conduct state-dependent local projections and regional sub-sample analysis.

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https://doi.org/https://doi.org/10.1016/j.jimonfin.2026.103528

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@article{md.2026,
  title        = {{Public spending and inclusive growth: A cross-country empirical analysis}},
  author       = {Md. Gazi Salah Uddin et al.},
  journal      = {Journal of International Money and Finance},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.jimonfin.2026.103528},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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