Expenditure Composition and Institutional Reform in Europe: A Policy Perspective

22 Pages Posted: 8 Mar 2012

See all articles by Peter Wierts

Peter Wierts

De Nederlandsche Bank; VU University Amsterdam

Date Written: March 31, 2005

Abstract

This paper evaluates adherence of EU member states to the agreed policy recommendations to (i) redirect public expenditure towards growth-enhancing items and (ii) to improve the efficiency and control of public expenditure. Results show that countries that have been at the forefront of institutional reform (i.e. ES, NL, FI, DK, SE, UK) also managed to redirect their public expenditure towards public investment (as a proxy for physical capital) and education (as a proxy for human capital). Furthermore, some countries that recorded large decreases in interest payments (EL, IT) largely used this room for maneuver for increasing expenditure on government consumption and on transfers, while opportunities for redirecting public expenditure were limited in other countries due to a relative increase in interest payments linked to increasing budget deficits (DE, FR).

Suggested Citation

Wierts, Peter, Expenditure Composition and Institutional Reform in Europe: A Policy Perspective (March 31, 2005). Available at SSRN: https://ssrn.com/abstract=2017665 or http://dx.doi.org/10.2139/ssrn.2017665

Peter Wierts (Contact Author)

De Nederlandsche Bank ( email )

P.O. Box 98
1000 AB Amsterdam
Netherlands

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081HV
Netherlands

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