Developing Asia is diverse; however, several common trends can be observed if similar economic circumstances are looked at together. In general, it can be said that given the exigencies of economic structure and history, most developing Asian Economies have elected to maintain a prudent rather than an active fiscal stance. Taxation and revenue mobilization instruments have not in general been used to alter the economic structure such that the tax burden is relatively high. Public spending, too, tends to be of an order of magnitude that generates a stable government debt-to-GDP ratio. Given this fiscal stance what has been the approach to ensuring that there is inclusive growth?
The overall finding from examining trends is that developing Asia in general has little resorted to redistributive measures in the pursuit of inclusive growth. Rather they have relied on fiscal policies to secure counter-cyclical stabilization of growth or to enhance human capital. At the same time, the macro-fiscal structure and the composition of revenue are not regressive overall, and there is evidence of appreciable spending when required to protect growth against external shocks.
