Fiscal Policy and Economic Development.

Contents -- I. Introduction -- II. Related Literature -- A. Growth of Government -- B. Taxation and the Traditional Sector -- C. Land Inequality and Development -- III. The Model -- A. Production -- B. Households -- C. Equilibrium -- D. Government -- IV. Explaining Fiscal Policy -- V. Government Debt -- VI. Calibration Experiments -- A. Calibrating the Model -- B. Historical Growth Experience of Currently Developed Countries -- C. Growth of Currently Developing Countries -- VII. Conclusion -- References -- Appendix -- Tables -- 1. Government in Developed and Developing Countries -- 2. Calibrated Parameters -- Figures -- 1. Selected Industrial Countries: Government Purchases (share of GDP) -- 2. Growth Rate in Productivity per Hour Worked (Annualized Percent) -- 3. Predicted (Dashed) versus Actual (Solid) Government Purchase Share -- 4. Predicted (Dashed) versus Actual (Solid) Government Investment Share -- 5. Predicted (Dashed) versus Actual (Solid) Labor Productivity Growth Rates -- 6. Tax Rates -- 7. Share of Labor Force in Modern Sector -- 8. Labor Productivity Growth Rates.