Advanced Search
MyIDEAS: Login to save this article or follow this journal

What Do OECD Countries Cut First When Faced with Fiscal Adjustments?

Contents:

Author Info

  • Ismael Sanz

    ()
    (Applied Economics I, Universidad Rey Juan Carlos, Campus de Vicalvaro, Paseo artilleros s/n, 28032 Madrid, Spain)

Abstract

Following the present scale of fiscal imbalances in developed countries, significant fiscal consolidation will be inevitable in the coming years. Fiscal discipline will require cuts in government expenditure, leading to trade-offs between different components of government expenditure. In this article, we explore the relationship between components of government expenditure and government size during the period 1970–2007 for a sample of 25 developed countries to shed light on how fiscal discipline might influence public spending composition in the coming years. Using the Pooled Mean Group estimation we find that fiscal adjustments protect functions that have both a social and productive character, such as education and health spending. In addition, the most productive spending, that related to transport and communications, is also isolated from budgetary cuts. This result shows evidence of governments reacting to the voter’s increasing realization that reducing productive expenditures harms long-term economic growth by striking a balance between utility and economic-growthenhancing expenditure.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 77 (2011)
Issue (Month): 3 (January)
Pages: 753-775

as in new window
Handle: RePEc:sej:ancoec:v:77:3:y:2011:p:753-775

Contact details of provider:
Web page: http://www.southerneconomic.org/
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Richard J. Cebula, 2013. "Budget Deficits, Economic Freedom, and Economic Growth in OECD Nations: P2SLS Fixed-Effects Estimates, 2003–2008," Journal of Private Enterprise, The Association of Private Enterprise Education, The Association of Private Enterprise Education, vol. 28(Spring 20), pages 75-96.
  2. Crafts, Nicholas, 2012. "Western Europe’s Growth Prospects: an Historical Perspective," CAGE Online Working Paper Series, Competitive Advantage in the Global Economy (CAGE) 71, Competitive Advantage in the Global Economy (CAGE).
  3. Robert A Buckle & Amy A Cruickshank, 2013. "The Requirements for Long-Run Fiscal Sustainability," Treasury Working Paper Series 13/20, New Zealand Treasury.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:77:3:y:2011:p:753-775. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.