The impact of the budgetary expenditure on economic growth in Eastern European countries

The impact of the budgetary expenditure on economic growth in Eastern European countries

1. Dobrota Gabriela

The fact that the allocations realized by the government at level of capital, education and training have a direct contribution to growth and reducing unemployment can not be disputed. However, many analyses performed on the correlation between the level and structure of public expenditure on the one hand and economic growth on the other hand, revealed often contrary results. What would be the explanation? This stems from the following aspects: ensuring the resources needed to finance the investments through increased taxes or the implementation of other taxes generating by distorsions; the emphasising the of the budget deficits amid such allocations; the increase of the social expenditure due to the increase of unemployment and the ageing of the population. The purpose of this paper is to identify in empirical mode the influence exercised by the level and structure of public expenditure on economic growth. To do this, we will try to determine the components of public expenditure which have the strongest influence on economic growth. The identification of the link between the growth of budgetary expenditure and final consumption can offer an overview on the allocation process of financial resources. At the same time, the analysis of the corelation between the budgetary revenues and budgetary expenditure allows an explanation of the type of connection, as well as the influence exercised by the tax policy.
The analysis carried out relates to use of a set of data on a number of East European countries, EU members for the period 2000 -2010. The reason for we chose this sample is the fact that their evolution from economic point of view was different though there were countries with centralized economies. In this context, expected result is represented by the identification of the public expenditure role in the faster or slower development to one or other of the countries in question. After the introduction and literature review, the paper is structured as follows. Section III presents the theoretical and methodological aspects of the issues analysed. Section IV is dedicated to the presentation of the results obtained. Finally, section V materialized the conclusions resulting from the analysis performed.

Ključne reči :

Tematska oblast: Government and economic development

Datum: 01.07.2012.

Br. otvaranja: 401


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