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Inequality, growth and public spending in Central, East and Southeast Europe

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  • Mario Holzner

    (The Vienna Institute for International Economic Studies)

Abstract

The article analyses the joint determinants of inequality and growth with a special emphasis on public spending structures in transition. We find especially government expenditures on subsidies to be negatively correlated with both inequality and growth, as more generally government expenditures seem to act counter-cyclically and inequality reducing. Also, there is a mutual benefit of low real interest rates, to both equity and economic development. This hints to the fact that in the late 1990's and early 2000's the European integration process allowed several of the transition economies to aim for the best of both worlds: equity and economic development.

Suggested Citation

  • Mario Holzner, 2011. "Inequality, growth and public spending in Central, East and Southeast Europe," Working Papers 221, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2011-221
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2011-221.pdf
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    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. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.

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    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

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