The authors develop a simple analytical framework that shows how the composition of public spending affects economic growth. Distinguishing between productive and unproductive government spending (that which complements private sector productivity and that which does not), they show that...

The public sector's performance in the Caribbean varies, in reducing poverty and in creating an enabling environment for growth. Barbados and the Bahamas have been the high performers, Guyana and the Dominican Republic have been sluggish, and the other Caribbean countries fall in between. In the...

Using a model of aid fungibility, the authors examine the relationship between foreign aid and public spending. Based on a panel of cross-country and time-series data, their results show that roughly 75 cents of every dollar given in net development assistance goes to current spending and 25...