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Government investment in the EU: the role of institutional factors

Author

Listed:
  • Francisco Barros Castro
  • Alessandra Cepparulo
  • Lea Degorre
  • Luis Garcia Lombardero
  • Michael Grams
  • Lucia Granelli
  • Laszlo Jankovics
  • Robert Kraemer
  • Christoph Maier
  • Maria Maierean
  • Philipp Mohl
  • Leire Ormaetxea Igarzabal
  • Aurelien Poissonnier
  • Mona Papadakou
  • Stefano Santacroce
  • Edouard Turkisch
  • Caroline Vandierendonck
  • Peter Voigt

Abstract

This part of the European Commission's report on public finances in EMU 2017 analyses the main drivers of government investment in the European Union. It puts a special emphasis on the role of institutional factors, such as the institutional arrangements across levels of government, the quality of governance and national fiscal rules. The main findings are threefold. First, governance quality is a key element to improve the value for money of public investment. This is the case both at the national and the sub-national level in all Member States analysed. Second, sub-national governments are at the forefront of public investment. Local governance, institutional arrangements and coordination across levels of governance are therefore key elements for the proper provision of public investment. Third, a sound institutional setup can support public investment. Strengthened fiscal rules can mitigate the depressionary effect of public debt on public investment.

Suggested Citation

  • Francisco Barros Castro & Alessandra Cepparulo & Lea Degorre & Luis Garcia Lombardero & Michael Grams & Lucia Granelli & Laszlo Jankovics & Robert Kraemer & Christoph Maier & Maria Maierean & Philipp , 2018. "Government investment in the EU: the role of institutional factors," Report on Public Finances in EMU, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, pages 132-132, January.
    • Handle: RePEc:euf:pfremu:pfr-2017-02
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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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