Has European Integration Approximated the Composition of Government Expenditures?

Abstract

Globalization and growth-maximizing governments may cause countries to converge towards a similar composition of government expenditures. These convergent forces may be even more intensive in the case of EU Member States engaged in the European integration process. The results obtained, through calculation of a constructed dissimilarity index and by adapting the usual indicators of convergence (b, s and g-convergence), reveal that there has been an harmonization process. In addition, this approach of structures of government expenditures has been greater in the EU than in the Non-EU countries of the OECD. Nevertheless, EU member states are converging towards a different steady state composition of government expenditures.

Keywords: composition of government expenditures, European economic integration, globalisation, convergence

JEL Classification: H11, H50, H60