posted on 2017-07-04, 13:16authored byLuca Agnello, Vitor CastroVitor Castro, Joao Tovar Jalles, Ricardo M. Sousa
We find that fiscal austerity is associated with a reduction of human development standards, with the negative effect being particularly severe in the case of spending-driven consolidation episodes. Fiscal adjustments are especially damaging for human development in developing countries (namely, African and Latin American countries). Additionally, the empirical evidence shows that: (i) government stability is a crucial institutional determinant of human development; and (ii) while investment in physical capital can boost human development, government consumption and inflation are detrimentalto it.
Funding
This work has been financed by Operational Programme for Competitiveness Factors -COMPETE and by National Funds through the FCT -Portuguese Foundation for Science and Technology within the remit of the project “FCOMP-01-0124-FEDER-037268 (PEst-C/EGE/UI3182/2013).” Castro also wishes to thank the financial support provided by the Portuguese Foundation for Science and Technology under the research grant SFRH/BSAB/113588/2015 (partially funded by COMPETE, QREN and FEDER).
History
School
Business and Economics
Department
Economics
Published in
Journal of International Development
Citation
AGNELLO, L. ...et al., 2017. The impact of fiscal consolidations on human development. Journal of International Development, 30 (3), pp.399-429.
This is the peer reviewed version of the following article: AGNELLO, L. ...et al., 2017. The impact of fiscal consolidations on human development. Journal of International Development, 30 (3), pp.399-429, which has been published in final form at https://doi.org/10.1002/jid.3309. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.