Why governments should stop non-social subsidies : measuring their consequences for rural Latin America / Ramon Lopez.

Format:

Book

Government document

Author/Creator:

López, Ramón, 1948-

Contributor:

World Bank.

Series:

Policy research working papers ; 3609.

World Bank e-Library.

Policy research working paper ; 3609

Language:

English

Subjects (All):

Subsidies--Latin America.

Subsidies.

Latin America--Appropriations and expenditures.

Latin America.

Latin America--Rural conditions.

Other Title:

Policy research working paper vol. 3609

Place of Publication:

[Washington, D.C. : World Bank, 2005]

System Details:

data file

Summary:

"The provision of public goods and the amelioration of market failure are the classical justifications for government intervention in the economy. In reality, (1) governments intervene in markets that are not affected by failure, and (2) a large share of the government resources is spent in private goods, not in public goods. In contrast to issue 1, issue 2 has received little attention in the literature, in spite of the potentially large efficiency and equity losses arising from misguided allocations of public expenditures. Lopez empirically documents the size of (2) in the rural sector and investigates its consequences for rural development for 10 Latin American countries over the 1985-2000 period. The econometric evidence suggests that the structure of public expenditures is an important factor of economic development in the rural sector, much greater than that of the level of public expenditures and of other factors on which the development literature has traditionally focused. Expanding total public expenditure in rural areas while maintaining the existing public expenditure composition prevailing in certain countries does little to promote agricultural income and reduce rural poverty. Spending a significant share of government resources in (non-social) subsidies causes less agriculture income, induces an excessive reliance of agriculture on land expansion, and reduces the income of the rural poor. "--World Bank web site.

Notes:

Title from PDF file as viewed on 5/13/2005.

Includes bibliographical references.

Publisher Number:

10.1596/1813-9450-3609