Effect of distributive policy on economic growth.
DOI:
https://doi.org/10.29201/peipn.v7i13.307Keywords:
Government selfish, distributive policies, political gain, economic growthAbstract
The aim of this paper is to analyze how the government determines the proportion of public spending to maximize its political benefit and stay in power. Using growth models and making modifications in them, this study demonstrates that the actions of public expenditure and growth rate are determined by the parameters of political gain. Also, the results of the simulations show that if the political gain of distribution policy is high, the government will allocate a greater share of the fund for purposes of distribution adversely affecting economic growth.
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