Government spending effectiveness and the quality of fiscal institutions

Garayeva, Aygun and Tahirova, Gulzar (2016): Government spending effectiveness and the quality of fiscal institutions.

Abstract

The cyclical behaviors of government spending and output are investigated for the time period 1996-2013, in the sample of 45 countries divided between 3 groups of countries – Western European, Eastern European and CIS countries – with each one of these groups representing a different development stage. Panel data fixed effects model was used for estimation purposes. In developed countries the main determinant of government spending effectiveness is found to be institutional quality, but access to financial markets is more pronounced in developing countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: fiscal policy, procyclicality, institutional quality, panel data, fixed effects
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; E - Macroeconomics and Monetary Economics > E0 - General > E02 - Institutions and the Macroeconomy; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy

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