Publication
Title
Public debt, economic growth, and public sector management in developing countries : is there a link?
Author
Abstract
The article investigates whether differences in public sector management quality affect the link between public debt and economic growth in developing countries. For this purpose, we primarily use the World Bank's institutional indices of public sector management (PSM). Using PSM thresholds, we split our panel into country clusters and make comparisons. Our linear baseline regressions reveal a significant negative relationship between public debt and growth. The various robustness exercises that we perform also confirm these results. When we dissect our data set into weak and strong county clusters using public sector management scores, however, we find different results. While public debt still displayed a negative relationship with growth in countries with weak public sector management quality, it generally displayed a positive relationship in the latter group. The tests for non-linearity shows evidence of an inverse-U-shape relationship between public debt and economic growth. However, we fail to see a similar significant relationship on country clusters that account for PSM quality. Yet, countries with well-managed public sectors demonstrate a higher public debt sustainability threshold. Copyright (c) 2015 John Wiley & Sons, Ltd.
Language
English
Source (journal)
Public administration and development. - Chichester
Publication
Chichester : 2015
ISSN
0271-2075
Volume/pages
35:5(2015), p. 329-346
ISI
000369860000001
Full text (Publishers DOI)
Full text (publishers version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Law 
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 06.11.2015
Last edited 18.05.2017
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