The Effect of Fiscal Policy on Economic Development in Jordan

Abstract

This research aims to examine the effect of the fiscal policy on economic development in Jordan during the time period (1989–2013), a mathematical model has been designed to measure this effect on economic development in Jordan. The researcher found that there is a statistically positive significant effect of the current expenses and annual tax revenues on economic development in Jordan, and at the same time there is a statistically negative significant effect of the capital expenditures on economic development in Jordan. The empirical results show that the elements of fiscal policy considered in this study are important variables in explaining economic development in Jordan, and the joint effect of the fiscal policy elements (annual tax revenues, current expenditures and capital expenditures) on economic development is statistically significant. In sum, current expenditures In contrast to taxes, give more per capita income returns. The fiscal adjustments based on capital expenditures reductions accompanied by efficiency in tax revenues collection have been considered as one of the successful forms of policy for increasing per capita income and promoting economic development simultaneously.