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Government Spending Effectiveness and the Quality of Fiscal Institutions

Author

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  • Aygun Garayeva

    (Economic analysis department, Center for Research and Development, Central Bank of the Republic of Azerbaijan, Baku, Azerbaijan)

  • Gulzar Tahirova

    (Economic analysis department, Center for Research and Development, Central Bank of the Republic of Azerbaijan, Baku, Azerbaijan)

Abstract

The cyclical behaviors of government spending and output are investigated for the time period 1996 – 2013, in the sample of 45 countries divided into 3 groups – Western European, Eastern European and CIS countries – with each one of these groups representing a different development stage. The main purpose of the study is to identify the main determinants of the effectiveness of government spending and especially, assess the role of institutional quality. 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.

Suggested Citation

  • Aygun Garayeva & Gulzar Tahirova, 2017. "Government Spending Effectiveness and the Quality of Fiscal Institutions," Business & Management Compass, University of Economics Varna, issue 2, pages 128-143.
    • Handle: RePEc:vrn:journl:y:2017:i:2:p:128-143
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    References listed on IDEAS

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    Cited by:

    1. Erum, Naila & Sohag, Kazi & Said, Jamaliah & Musa, Kazi & Asghar, Muhammad Mansoor, 2024. "Governance, fiscal expenditure, and economic growth in OIC countries: Role of natural resources and information communication technology," Resources Policy, Elsevier, vol. 90(C).
    2. Azra Khan & Sadia Safdar & Samina Bibi, 2021. "Fiscal Discretion And Aggregate Demand: A Case Study Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 10(2), pages 204-220.
    3. Duy-Tung Bui, 2018. "Fiscal policy and national saving in emerging Asia: challenge or opportunity?," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(2), pages 305-322, August.

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    More about this item

    Keywords

    fiscal policy; procyclicality; institutional quality; panel data; fixed effects;
    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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