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New Econometric Estimates of Long-term Growth Effects of Different Areas of Public Spending


  • Omar Barbiero

    (Bocconi University)

  • Boris Cournède



Using panel data for OECD countries, this study investigates the extent to which changes in government spending on education, health and other areas influence long-term growth. The results suggest that, if total government spending is kept unchanged, increasing expenditure on health, education and transport raises long-term GDP growth. In contrast, government spending on housing is found to weaken long-term GDP growth. The error-correction specification used allows assessing adjustment speed which, consistent with intuition, is estimated to be slow. According to the econometric results, it takes more than five years for half of the effect of a change in the structure of government spending to be reflected in longterm growth. Nouvelles évaluations économétriques de l'effet à long terme sur la croissance de différentes catégories de dépense publique Au moyen de données de panel pour les pays de l’OCDE, cette étude examine la manière dont les modifications du niveau des dépenses publiques d’éducation, de santé et dans d’autres domaines influencent la croissance à long terme. Les résultats suggèrent que, pour un niveau donné de dépenses publiques totales, une augmentation des dépenses de santé, d’éducation et de transport augmente la croissance à long terme. À l’inverse, les dépenses publiques de logement semblent affaiblir la croissance à long terme. Le modèle à correction d’erreur employé pour cette étude permet d’évaluer la vitesse d’ajustement qui, conformément à l’intuition, se révèle être lente. D’après les résultats économétriques, il faut compter plus de cinq ans avant que 50% des effets d’un changement de la structure des dépenses publiques ne se fassent sentir dans la croissance à long terme.

Suggested Citation

  • Omar Barbiero & Boris Cournède, 2013. "New Econometric Estimates of Long-term Growth Effects of Different Areas of Public Spending," OECD Economics Department Working Papers 1100, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1100-en
    DOI: 10.1787/5k3txn15b59t-en

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    Cited by:

    1. Ibrar Hussain & Zahoor Khan & Muhmmad Rafiq, 2017. "Compositional Changes in Public Expenditure and Economic Growth: Time Series Evidence from Pakistan," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 9(1), pages 1-20, March.
    2. Guarini, Giulio & Laureti, Tiziana & Garofalo, Giuseppe, 2020. "Socio-institutional determinants of educational resource efficiency according to the capability approach: An endogenous stochastic frontier analysis," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    3. Sabrina Auci & Laura Castellucci & Manuela Coromaldi, 2021. "How does public spending affect technical efficiency? Some evidence from 15 European countries," Bulletin of Economic Research, Wiley Blackwell, vol. 73(1), pages 108-130, January.
    4. A. A. Shirov & M. S. Gusev & I. E. Frolov, 2018. "Macroeconomic Effects of Russian Defense Expenditures: Retrospective Analysis and Forecast," Studies on Russian Economic Development, Springer, vol. 29(4), pages 343-351, July.
    5. Boris Cournède & Antoine Goujard & Álvaro Pina, 2013. "How to Achieve Growth- and Equity-friendly Fiscal Consolidation?: A Proposed Methodology for Instrument Choice with an Illustrative Application to OECD Countries," OECD Economics Department Working Papers 1088, OECD Publishing.
    6. Alessandra Cepparulo & Gilles Mourre, 2020. "How and How Much? The Growth-Friendliness of Public Spending through the Lens," European Economy - Discussion Papers 2015 - 132, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Annabelle Mourougane & Jarmila Botev & Jean-Marc Fournier & Nigel Pain & Elena Rusticelli, 2016. "Can an Increase in Public Investment Sustainably Lift Economic Growth?," OECD Economics Department Working Papers 1351, OECD Publishing.
    8. Anna Mozdzierz, 2017. "Koncepcje wydatkow rozwojowych w Polsce," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 15(67), pages 35-52.
    9. Sanja Borkovic & Peter Tabak, 2018. "Public investment and corporate productivity in Croatia," Public Sector Economics, Institute of Public Finance, vol. 42(2), pages 171-186.

    More about this item


    croissance à long terme; croissance économique; dépenses publiques; dépenses publiques de santé; dépenses publiques d’infrastructure; dépenses publiques d’éducation; economic growth; government expenditure; government infrastructure spending; long-term growth; public education spending; public health spending; public spending;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

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