Submitted:
11 September 2020
Posted:
13 September 2020
You are already at the latest version
Abstract
This study examines whether government spending efficiency is associated with differential effects of public investment on debt-to-GDP ratio for a panel data consisting of 16 developing countries in Asia-Pacific region over the period 2007-2017. Public investment is central to implementing the UN 2030 Agenda for Sustainable Development — but high debt-to-GDP ratio poses a key risk. The empirical results indicate that public investment efficiency moderates debt-to-GDP ratio whereas public investment in the midst of public sector corruption accentuates debt-to-GDP ratio. The results have important policy implications.
Keywords:
public debt
; government spending efficiency
; public investment
; public sector corruption
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