In this dissertation, I visit areas of government spending that are core to human development and economic growth, and have equity and efficiency considerations. In the first essay, I examine the relationship between education and air pollution. How pollution affects education is typically studied through the health aspects of pollution exposure, and its subsequent effects on academic performance. This essay proposes a financing channel of pollution’s impact on education outcome. School districts with better air quality are endowed with higher tax base, and can generate more resources. Panel fixed effect analysis for a group of metropolitan school districts in the USA suggests that decrease in air pollution increases property tax revenue per pupil in the district. The second essay investigates the incidence of broad-based energy subsidies, and whether poor households could gain from targeted transfer programs financed by savings from reform. I analyze the tariff differential subsidy program in Pakistan, and find that the subsidy is regressive. I conduct a CGE exercise and find that reducing energy subsidy and redistributing savings to poor households, would improve poor household’s welfare. The third essay studies how public infrastructure capital affects growth in developing countries. The relationship between infrastructure and economic growth is widely studied in developed country context. This study contributes to literature by estimating output elasticities with respect to public infrastructure capital stock for two developing countries – Mauritius and Bangladesh. Estimated output elasticities are mostly positive for both countries, which suggests that public infrastructure stimulates economic growth in developing countries.