El tamaño del estado y su impacto sobre el nivel de desarrollo

Abstract

Economies promote different strategies to achieve objectives related to health, poverty, education, among other elements. One of the strategies is related to public spending through which investments are made with the ultimate goal of improving the living conditions of the inhabitants. However, public spending does not necessarily increase the well-being of the population, since it depends on aspects such as governance, institutionality and equality. This research aims to determine the impact of public spending on the level of human development measured by the Human Development Index (HDI). An inverted U relationship is expected between the HDI and public spending, indicating that spending increases human well-being, but excessive spending slows down development. To test the hypothesis, the generalized method of moments (GMM) is applied to panel data systems. The analysis unit is made up of 139 countries belonging to the OECD, America, Asia and Africa during the period 2005-2019. The database contains information on external and real sector factors, governance and socioeconomic factors. The results show an inverted U relationship between the HDI and public spending. Indicating that public spending improves the HDI, but excessive spending worsens the achievement of human development. In addition, through iteration effects, the findings indicate that in countries with high levels of fiscal pressure and trade openness, higher public spending worsens human development, while, when countries face high inflationary levels, public spending helps reduce human development. improve the HDI. The study derives important implications for public policy strategy