[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/wii/wpaper/71.html
   My bibliography  Save this paper

Inequality, Growth and Public Spending in Central, East and Southeast Europe

Author

Listed:
  • Mario Holzner

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract
The paper analyses the joint determinants of inequality and growth with a special emphasis on public spending structures in transition. The mutual benefit of low real interest rates, to both equity and economic development is a major result of this paper. In terms of public spending items we find a positive correlation with equity and a negative one with growth as several of the government expenditure items seem to act counter-cyclically. In the late 1990s and early 2000s the European integration process allowed most of the transition economies to aim for the best of both worlds equity and economic development.

Suggested Citation

  • Mario Holzner, 2010. "Inequality, Growth and Public Spending in Central, East and Southeast Europe," wiiw Working Papers 71, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:71
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/inequality-growth-and-public-spending-in-central-east-and-southeast-europe-dlp-2202.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Matyas, Laszlo & Lovrics, Laszlo, 1990. "Small sample properties of simultaneous error components models," Economics Letters, Elsevier, vol. 32(1), pages 25-34, January.
    2. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, April.
    3. Badi H. Baltagi, 2021. "Simultaneous Equations with Error Components," Springer Texts in Business and Economics, in: Econometric Analysis of Panel Data, edition 6, chapter 0, pages 157-186, Springer.
    4. Patrick Sevestre & Laszlo Matyas, 2008. "The Econometrics of Panel Data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00279977, HAL.
    5. Luiz de Mello & Erwin R. Tiongson, 2006. "Income Inequality and Redistributive Government Spending," Public Finance Review, , vol. 34(3), pages 282-305, May.
    6. Baltagi, Badi H. & Liu, Long, 2009. "A note on the application of EC2SLS and EC3SLS estimators in panel data models," Statistics & Probability Letters, Elsevier, vol. 79(20), pages 2189-2192, October.
    7. Sebastian Leitner & Mario Holzner, 2008. "Economic Inequality in Central, East and Southeast Europe," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 5(1), pages 155-188.
    8. Edward Castronova, 2001. "Inequality and income: The mediating effects of social spending and risk," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(2), pages 395-415, July.
    9. Sylwester, Kevin, 2002. "Can education expenditures reduce income inequality?," Economics of Education Review, Elsevier, vol. 21(1), pages 43-52, February.
    10. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    11. László Mátyás & Patrick Sevestre (ed.), 2008. "The Econometrics of Panel Data," Advanced Studies in Theoretical and Applied Econometrics, Springer, number 978-3-540-75892-1.
    12. Pak Hung Mo, 2000. "Income Inequality and Economic Growth," Kyklos, Wiley Blackwell, vol. 53(3), pages 293-315, August.
    13. Andreas Bergh & Günther Fink, 2008. "Higher Education Policy, Enrollment, and Income Inequality," Social Science Quarterly, Southwestern Social Science Association, vol. 89(1), pages 217-235, March.
    14. Banerjee, Abhijit V & Duflo, Esther, 2003. "Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-299, September.
    15. International Monetary Fund, 2003. "Income Inequality and Redistributive Government Spending," IMF Working Papers 2003/014, International Monetary Fund.
    16. Barro, Robert J, 2000. "Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
    17. Zhang, Lei, 2008. "Political economy of income distribution dynamics," Journal of Development Economics, Elsevier, vol. 87(1), pages 119-139, August.
    18. Balestra, Pietro & Varadharajan-Krishnakumar, Jayalakshmi, 1987. "Full Information Estimations of a System of Simultaneous Equations with Error Component Structure," Econometric Theory, Cambridge University Press, vol. 3(2), pages 223-246, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Mursit Recepoglu, 2022. "Public Expenditures, Economic Growth and Income Inequality: Empirical Evidence from the Commonwealth of Independent States," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 9(2), pages 293-314, July.
    2. Ángeles Sánchez & Antonio L. Pérez-Corral, 2018. "Government Social Expenditure and Income Inequalities in the European Union," Hacienda Pública Española / Review of Public Economics, IEF, vol. 227(4), pages 133-156, December.
    3. Adnan Efendic & Naida Trkic-Izmirlija, 2013. "Effects of the global economic crisis and public spending on income distribution in Bosnia and Herzegovina," wiiw Balkan Observatory Working Papers 108, The Vienna Institute for International Economic Studies, wiiw.
    4. Dincă Marius Sorin & Dincă Gheorghița, 2013. "The Impact of Government Expenditures upon Economic Growth in Post-Communist Countries," Scientific Annals of Economics and Business, Sciendo, vol. 60(1), pages 126-134, July.
    5. Mario Holzner, 2013. "Inequality and the Crisis: A Causal Inference Analysis," wiiw Balkan Observatory Working Papers 110, The Vienna Institute for International Economic Studies, wiiw.
    6. Monica Szeles, 2013. "Re-examining the relationship between economic growth and inequality in the New Member States," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(5), pages 2799-2813, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Niklas Potrafke, 2012. "Political cycles and economic performance in OECD countries: empirical evidence from 1951–2006," Public Choice, Springer, vol. 150(1), pages 155-179, January.
    2. David Castells & Vicente Royuela, 2012. "Agglomeration, Inequality and Economic Growth: Cross-section and panel data analysis," ERSA conference papers ersa12p492, European Regional Science Association.
    3. Benabou, Roland, 2005. "Inequality, Technology and the Social Contract," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 25, pages 1595-1638, Elsevier.
    4. Bourguignon, Francois, 2005. "The Effect of Economic Growth on Social Structures," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 27, pages 1701-1747, Elsevier.
    5. Patrizio Pagano, 2004. "An empirical investigation of the relationship between inequality and growth," Temi di discussione (Economic working papers) 536, Bank of Italy, Economic Research and International Relations Area.
    6. Odusanya Ibrahim Abidemi & Akinlo Anthony Enisan, 2020. "Growth effect of income inequality in sub-Saharan Africa: exploring the transmission channels," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(2), pages 176-190, June.
    7. Muinelo-Gallo, Leonel & Roca-Sagalés, Oriol, 2013. "Joint determinants of fiscal policy, income inequality and economic growth," Economic Modelling, Elsevier, vol. 30(C), pages 814-824.
    8. Potrafke, Niklas, 2010. "The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?," Journal of Health Economics, Elsevier, vol. 29(6), pages 797-810, December.
    9. David Castells-Quintana & Vicente Royuela, 2014. "Agglomeration, inequality and economic growth," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 343-366, March.
    10. Jakub Bartak & Łukasz Jabłoński, 2020. "Inequality and growth: What comes from the different inequality measures?," Bulletin of Economic Research, Wiley Blackwell, vol. 72(2), pages 185-212, April.
    11. José Carlos Coelho & José Alves, 2021. "How inequality drives growth: an investigation of the transmission channels for OECD countries," Working Papers REM 2021/0194, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    12. repec:kap:iaecre:v:16:y:2010:i:4:p:358-370 is not listed on IDEAS
    13. Sadullah Çelik & Ulkem Basdas, 2010. "How Does Globalization Affect Income Inequality? A Panel Data Analysis," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(4), pages 358-370, November.
    14. Lina Lu, 2017. "Simultaneous Spatial Panel Data Models with Common Shocks," Supervisory Research and Analysis Working Papers RPA 17-3, Federal Reserve Bank of Boston.
    15. Mitze, Timo & Alecke, Björn & Untiedt, Gerhard, 2008. "Trade, FDI and Cross-Variable Linkages: A German (Macro-)Regional Perspective," MPRA Paper 12245, University Library of Munich, Germany.
    16. Fuad Hasanov & Oded Izraeli, 2011. "Income Inequality, Economic Growth, And The Distribution Of Income Gains: Evidence From The U.S. States," Journal of Regional Science, Wiley Blackwell, vol. 51(3), pages 518-539, August.
    17. Devdatta Ray & Mikael Linden, 2018. "Health, inequality and income: a global study using simultaneous model," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-28, December.
    18. Arturas Juodis, 2013. "Cointegration Testing in Panel VAR Models Under Partial Identification and Spatial Dependence," UvA-Econometrics Working Papers 13-08, Universiteit van Amsterdam, Dept. of Econometrics.
    19. Alexander Klemm & Stefan Parys, 2012. "Empirical evidence on the effects of tax incentives," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(3), pages 393-423, June.
    20. Patrizia Ordine & Giuseppe Rose, 2008. "Local Banks Efficiency and Employment," LABOUR, CEIS, vol. 22(3), pages 469-493, September.
    21. Nancy Birdsall, 2008. "Income Distribution: Effects on Growth and Development," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 48, Edward Elgar Publishing.

    More about this item

    Keywords

    inequality; government expenditures; economic growth; transition;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wii:wpaper:71. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Customer service (email available below). General contact details of provider: https://edirc.repec.org/data/wiiwwat.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.