Investigation of the Relationship between Government Expenditure and Country’s Economic Development in the Context of Sustainable Development
Authors: Lina Sinevičienė
Arising problems of countries’ public finances, social and demographic changes motivate scientific and policy debates on public spending size, structure and efficiency in order to meet the changing needs of society and business. The concept of sustainable development poses new challenges for scientists and policy-makers in the field of public finance. This paper focuses on the investigation of the relationship between government expenditure and country’s economic development in the context of sustainable development. Empirical analysis focuses on the data of the European Union (except Croatia and Luxemburg) countries. The study covers 2003 – 2012 years, using annual cross-sectional data. Summarizing the research results, it can be stated that governments should pay more attention to the needs that ensure sustainable development in the long-run when formulating public expenditure policy, particularly in the field of environment protection.
Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1099500Procedia APA BibTeX Chicago EndNote Harvard JSON MLA RIS XML ISO 690 PDF
 J. M. Harris, “Basic principles of sustainable development,” Global Development and Environment Institute, Working Paper no. 00–04, 2000.
 U. Pisano, A. Martinuzzi, and B. Bruckner, “The financial sector and sustainable development: logics, principles and actors,” European Sustainable Development Network (ESDN), Quarterly Report no. 27, December 2012.
 T. Uryszek, “Public finance crisis and sustainable development financing – evidence from EU economies,” Copernican Journal of Finance & Accounting, vol. 3, no. 1, pp. 161–173, 2014.
 L. Sineviciene, and A. Vasiliauskaite, “Fiscal policy interaction with private investment: the case of the Baltic States,” Inzinerine Ekonomika- Engineering Economics, vol. 23, no. 3, pp. 233-241, 2012.
 S. Lamartina, and A. Zaghini, “Increasing public expenditures: Wagner's law in OECD countries,” CFS Working Paper, no. 2008/13, 2008.
 C. Alexiou, “Government spending and economic growth: econometric evidence from the South Eastern Europe,” Journal of Economic and Social Research, vol. 11, no. 1, pp. 1-16, 2009.
 N. Bayraktar, and B. Moreno-Dodson, “How can public spending help you grow? An empirical analysis for developing countries,” Policy Research Working Paper 5367, The World Bank, July 2010.
 M. Taiwo, and T. Abayomi, “Government expenditure and economic development: empirical evidence from Nigeria,” European Journal of Business and Management, vol. 3, no.9, pp. 18-28, 2011.
 M. A. Oyinlola, and O. Akinnibosun, “Public expenditure and economic growth nexus: Further evidence from Nigeria,” Journal of Economics and International Finance, vol. 5, no. 4, pp. 146-154, July 2013.
 M. S. Dincă, and G. Dincă, “The impact of government expenditures upon economic growth in post-communist countries,” Scientific Annals of the „Alexandru Ioan Cuza” University of Iaşi Economic Sciences, vol. 60, no. 1, pp. 83-92, 2013.
 S. Martins, and F. J. Veiga, “Government size, composition of public expenditure, and economic development,” International Tax and Public Finance, vol. 21, no. 4, pp 578-597, August 2014.
 European Commission, Eurostat database, 2014.
 K. Blackburn, N. Bose, and M. E. Haque, “public expenditures, bureaucratic corruption and economic development,” The Manchester School, vol. 79, no. 3, pp. 405–428, June 2011.
 A. S. Rajkumar, and V. Swaroop, “Public spending and outcomes: Does governance matter?,” Journal of Development Economics, vol. 86, pp. 96–111, 2008.