This is a problem because, as a rule, tax-GDP ratios in developing countries are much lower. In industrialized economies, where tax-GDP ratios are much higher, the debate is about tax-cuts. In the sphere of expenditure, developing countries are characterized by proportionately larger government sectors where degrees of freedom are circumscribed by political compulsions, possibly more than in industrialized economies. What is more, in developing countries, the proportion of investment expenditure in total public expenditure is higher than in industrialized economies because private investment in infrastructure is not always forthcoming. Yet, in difficult times, it is such investment expenditure that is axed because governments find it very difficult to cut consumption expenditure. This means that excessive fiscal stringency imposes a high cost in terms of lost growth. In industrialized