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Size and quality of public sector and economic growth changes occurring in the former communist EU countries

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  • Laura OBREJA-BRASOVEANU

    (Universidade Portucalense)

Abstract

The impact of fiscal policy on economic growth is a complex and contradictory topic in finance debates. Government influences real economy through the impact of public revenues and expenditures on the quantity and quality of production factors, labor and capital. High taxation for supporting big public sector can impede growth. On the other hand, some of the public expenditures can stimulate growth. These opposite effects of the public sector’s intervention through fiscal policy raise the debate about the performance of public sector in stimulating economic growth. The size and the quality of public sector is a reflection of the past and current political decisions. Ex-communist countries face the challenge of reconstructing the public sector, in order to correspond to the requirements of the market economy, but also to ensure a stable macroeconomic and social environment. The aim of this paper is to analyze the differences between developed EU countries and former communist EU countries regarding the public sectors and economic growth.

Suggested Citation

  • Laura OBREJA-BRASOVEANU, 2011. "Size and quality of public sector and economic growth changes occurring in the former communist EU countries," Working Papers 17/2011, Universidade Portucalense, Centro de Investigação em Gestão e Economia (CIGE).
    • Handle: RePEc:ris:cigewp:2011_017
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    File URL: http://wwwa.uportu.pt/siaa/Investigacao/WP_17_2011.pdf
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    References listed on IDEAS

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    Cited by:

    1. Irena Szarowská, 2016. "Quality of Public Finance and Economic Growth in the Czech Republic," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 64(4), pages 1373-1381.

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    More about this item

    Keywords

    fiscal policy; size of public sector; quality of public sector; economic growth;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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