Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth

Spending Smarter: How Efficient and Well-Allocated Public Spending Can Boost Economic Growth

This Fiscal Monitor explores how governments can improve economic growth prospects by enhancing the efficiency and composition of public spending. Redirecting public spending toward infrastructure, education, health, and research and development, without increasing overall spending, can deliver significant long-term gains in output. Closing gaps in efficiency can further magnify these gains, with institution-building being the most effective strategy. The analysis provides new global and time-varying datasets of public spending efficiency and rigidity.