Fiscal policy and long-run growth

This paper discusses in a systematic and comprehensive way the existing literature on the relationship between rite growth of countries' economies and various public finance instruments, such as tax policy, expenditure policy, and over-all budgetary policy, from the perspectives of allocative efficiency, macroeconomic stability, and income distribution. it reviews both the conceptual linkages between each of the instruments and growth and the empirical evidence of such relationships. The paper broadly concludes that fiscal policy could play a fundamental role in affecting the long-run growth performance of countries.