Public spending in developing countries: trends, determination, and impact, Meta-analysis of evaluations

2.1.6. Improvement of impact of policy frameworks

Recommendation: 3. Advocate to increase expenditures on research/data collection to inform investments that will affect strengthening of rural enterprise management in subjects such as transport, storage facilities, marketing of farm and non-farm products/services, distribution of seeds, etc.

Reference: Fan, S. & Rao, N., 2003, Public spending in developing countries: trends, determination, and impact, Meta-analysis of evaluations, EPTD Discussion Paper, International Food Policy Research Institute, Washington DC.

Evidence sample: In an analysis of government expenditure and agricultural data (drawn from IMF, WB and FAO databases) for 43 developing countries (Asia, Africa, Latin America) from 1980 to 1998, Fan et al (2003) found that government agricultural expenditure contributed strongly to agricultural growth. The provision of public goods in the form of roads, irrigation and education all had positive and statistically significant effects. Disaggregating total agricultural expenditure into research and non-research expenditure components, revealed that although both their coefficients are positive, the coefficient for agricultural research is larger in magnitude and more significant, and suggesting that productivity- enhancing expenditures, such as agricultural research investment, have larger output- promoting effects than other forms of public spending on agriculture.