Developing countries try to achieve sustainable reduction of poverty and growth in real income and national GDP. Accordingly, fulfilling the overriding objectives of poverty reduction and economic growth require these countries to devote much of their valuable resources in such development endeavors. Given that the private sector has not been developed yet and that there exist many infrastructure bottlenecks, governments in developing countries have to play vital roles in economic development through their fiscal instruments such as public expenditure and other intervention tools. The aim of these government activities is to create a wider base for the economy so that the country could grow substantially and rapidly. Considering above mentioned background and experiences, this thesis investigated the performances of government expenditures in addressing the problem of poverty through GDP, wage and employment growth with an especial care for various government expenditures in the Bangladesh economy. We also evaluated briefly the dynamics and evolution of persistent poverty in Bangladesh because we believe that understanding the causes of poverty is a crucial and preliminary task before suggesting appropriate policies. In this chapter we are going to turn a conclusion for the study. The chapter starts with a summary of the entire thesis and then provides some recommendations of policy perspective for some of the key economic sectors in Bangladesh.
At the beginning of the thesis, main features of the Bangladesh economy have been reviewed in order to get a clear picture of the said economy. Such a revisit was helpful in pointing out the impacting factors of economic growth and poverty in the country. Throughout our discussion which focused mainly on some of the key economic and social indicators, it was
113 revealed that performances of the economy during last two decades were impressive.
Bangladesh has been growing comparatively rapidly and the contribution of major economic sectors to GDP was remarkably good. n the contrary, the country‘s achievement in raising national savings and investment rates and controlling inflation were showed to be insignificant and unsatisfactory. Bangladesh has been facing poverty and inequality due to low rate of wages, lack of employment and insufficient household incomes.
Comparing data for aggregate level trends in poverty and its spatial variation, poverty gaps indices etc. for 2005 and 2010 showed a notable progress in the country. We also found that although the country could reduce poverty to a certain extent, millions of people in all seven divisions still suffer from the curse of rampant poverty. Moreover, many middle income households who were not counted as poor originally bear a risk of falling back below poverty line in the case the impacts of consumer price indices (CPI) and food price inflation are considered.
In order to fight poverty by causing growth in GDP and creating more employment opportunities, public expenditure in basic economic as well as social sectors were emphasized in Bangladesh. Cost-effective poverty reduction programs were implemented and more government spending in a provision of public goods for pro-poor sectors that are relevant to human and income poverty were achieved side by side. However, public expenditure in the country (at least for sectors such as education and health) appeared to be skewed to some groups who are non-poor. Poor people do not get their proper share in resources spent by the State. They get comparatively less than the richer group of the population and they also receive lower absolute as well as per capita amounts.
We found that the correlations between various public spending and economic growth were absent in Bangladesh. Public expenditure also did not maintain any clear correlation with
114 poverty rates, although, theory suggests an important link between poverty and public expenditure. The impact, however, depends on the economic context, the country‘s initial capital base and amount of the spending that was happened.
Considering above findings, the present study has focused on a set of time series data from the Bangladesh Government‘s ADP expenditure for 31 years and measured the impacts imposed by various public spending in some thrust sectors of the economy. Later underlying causes of policy‘s failure (to reduce poverty significantly by effective use of public funds) were investigated by using a PETS-QSDS survey undertaken in the primary education sub-sector of the country. Our findings from the econometric tests and regression analysis verified the study‘s first hypothesis. The results and coefficients of various sector specific public expenditure showed that most of the ADP expenditures in the country has been wasted and flittered away.
Later an effort was made to investigate the reasons behind the situation. Our findings from the PETS-QSDS survey conducted in the primary education sub-sector while considering it as a test case have indicated some of the major impediments in Bangladesh‘s public expenditure management policies. Widespread corruption in resource management hierarchy, leakages of funds and/or political and bureaucratic capture, and a lack of accountability and transparency in public expenditure management system, lack of equity in fund disbursement practices and insufficient grants appeared to be some of the underlying reasons behind the situation. Agency problems in two layers namely „between the citizens and politicians‟ and
„between citizens and service providers‟ also lowered significantly the welfare effects of public expenditure in the sector. These phenomena were checked and verified in the second hypothesis of the thesis by our primary data from the PETS-QSDS survey. In this way we have done a brief evaluation of our main hypotheses as they were presented in chapter one.
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