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The Effects of Integration on the Structure of Government Expenditure - Empirical Evidence from the EU and EFTA Member States

Finnsdóttir, María LU (2012) NEKP01 20121
Department of Economics
Abstract (Swedish)
The vast literature on integration and public policies suggests a relationship between integration and public spending. The purpose of this study is to examine whether integration has affected the structure of public spending in the member states of the European Union and European Free Trade Association in 1996-2009. Both aggregate and ten disaggregated spending components will be examined and five different integration indices employed to capture various possible effects. In addition, the sample will be divided into core and periphery countries to see whether integration has had different impacts on those two country groups. The results of the analysis show that integration has had different effects on a number of spending components, and... (More)
The vast literature on integration and public policies suggests a relationship between integration and public spending. The purpose of this study is to examine whether integration has affected the structure of public spending in the member states of the European Union and European Free Trade Association in 1996-2009. Both aggregate and ten disaggregated spending components will be examined and five different integration indices employed to capture various possible effects. In addition, the sample will be divided into core and periphery countries to see whether integration has had different impacts on those two country groups. The results of the analysis show that integration has had different effects on a number of spending components, and thus altered the structure of public expenditures. Negative effects are captured on the largest spending components, indicating a decrease in government size while the results support an increase in productive spending to some extent. The analysis of the core and periphery countries has similar implications. However, aggregate spending in core countries is negatively affected, which contradicts theory that states that core countries are better able to sustain tax bases and in less need to alter spending. Overall the results favor the efficiency hypothesis. (Less)
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author
Finnsdóttir, María LU
supervisor
organization
course
NEKP01 20121
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Integration, structure of public spending, disaggregated spending components, core, periphery.
language
English
id
3051925
date added to LUP
2012-09-27 11:43:26
date last changed
2012-09-27 11:43:26
@misc{3051925,
  abstract     = {The vast literature on integration and public policies suggests a relationship between integration and public spending. The purpose of this study is to examine whether integration has affected the structure of public spending in the member states of the European Union and European Free Trade Association in 1996-2009. Both aggregate and ten disaggregated spending components will be examined and five different integration indices employed to capture various possible effects. In addition, the sample will be divided into core and periphery countries to see whether integration has had different impacts on those two country groups. The results of the analysis show that integration has had different effects on a number of spending components, and thus altered the structure of public expenditures. Negative effects are captured on the largest spending components, indicating a decrease in government size while the results support an increase in productive spending to some extent. The analysis of the core and periphery countries has similar implications. However, aggregate spending in core countries is negatively affected, which contradicts theory that states that core countries are better able to sustain tax bases and in less need to alter spending. Overall the results favor the efficiency hypothesis.},
  author       = {Finnsdóttir, María},
  keyword      = {Integration,structure of public spending,disaggregated spending components,core,periphery.},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Effects of Integration on the Structure of Government Expenditure - Empirical Evidence from the EU and EFTA Member States},
  year         = {2012},
}