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An analysis of COFOG expenditures in former Yugoslavian countries
Article | Year: 2023 | Pages: 233 - 254 | Volume: 47 | Issue: 2 Received: June 1, 2022 | Accepted: January 16, 2023 | Published online: June 12, 2023
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FULL ARTICLE
FIGURES & DATA
REFERENCES
CROSSMARK POLICY
METRICS
LICENCING
PDF
|
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Total
expenditures
|
General
public
services
|
Defence
|
Public order
and safety
|
Economic
affairs
|
Environmental
protection
|
|
Intercept
|
4.35
(1.55)
|
0.77
(1.8)*
|
0.22
(2.47)**
|
0.1
(1.18)
|
2.96
(3.93)***
|
0.05
(1.55)
|
|
Et-1
|
-0.11
(1.67)
|
-0.11
(1.8)*
|
-0.21
(2.92)***
|
-0.06
(1.6)
|
-0.54
(4.25)***
|
-0.16
(2.21)**
|
|
Housing and
community amenities
|
Health
|
Recreation,
culture
and religion
|
Education
|
Social
protection
|
|
Intercept
|
0.04
(0.61)
|
0.95
(2.28)**
|
0.08
(2.11)**
|
0.17
(0.92)
|
0.84
(1.47)
|
|
Et-1
|
-0.04
(0.75)
|
-0.17
(2.35)**
|
-0.1
(2.98)***
|
-0.06
(1.36)
|
-0.07
(1.74)*
|
Obs.: 53; Method: OLS. Note: ***, **, * indicate statistical significance at 1%, 5% and 10%, respectively. T-statistics computed using OLS residuals is reported in parenthesis.
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Total
Expenditures
|
General
public services
|
Defence
|
Public
order and safety
|
|
Method
|
OLS
|
GMM
|
OLS
|
GMM
|
OLS
|
GMM
|
OLS
|
GMM
|
|
Output gap
|
-0.55
(-3.01)***
|
-0.67
(-4.11)***
|
-0.12
(-1.56)
|
-0.14
(-2.28)**
|
0.02
(1.4)
|
0.03
(1.49)
|
-0.02
(-1.24)
|
-0.03
(-2.41)**
|
|
Lagged
endogenous
|
0.37
(3.11)***
|
0.33
(7.33)***
|
0.5
(4.73)***
|
0.66
(3.71)***
|
0.77
(10.21)***
|
0.74
(7.84)***
|
0.63
(6.55)***
|
0.61
(3.14)***
|
|
R2
|
0.85
|
|
0.87
|
|
0.82
|
|
0.93
|
|
|
Individual
fixed effects
|
Yes
(0.0009)
|
|
Yes
(0.008)
|
|
Yes
(0.0717)
|
|
Yes
(0.0297)
|
|
|
Period fixed
effects
|
No
|
|
No
|
|
Yes
(0.0772)
|
|
No
|
|
|
Wald
|
0.0118
|
|
|
|
|
|
|
|
|
Pesaran CD
|
0.1350
|
|
|
|
|
|
|
|
|
B-G test
|
0.8532
|
|
|
|
|
|
|
|
|
Hansen test
|
|
0.3052
|
|
0.6803
|
|
0.6356
|
|
0.7494
|
|
A-B AR(2)
|
|
0.3101
|
|
0.6226
|
|
0.1620
|
|
0.1576
|
|
Observations
|
64
|
58
|
64
|
58
|
64
|
58
|
64
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic
affairs
|
Environmental
protection
|
Housing
and community amenities
|
Health
|
|
Method
|
OLS
|
GMM
|
OLS
|
GMM
|
OLS
|
GMM
|
OLS
|
GMM
|
|
|
Output gap
|
-0.07
(-0.48)
|
0.06
(0.51)
|
0.002
(0.22)
|
0.001
(0.15)
|
-0.01
(-0.45)
|
0.01
(0.27)
|
-0.07
(-2.57)**
|
-0.1
(-5.61)***
|
|
|
Lagged
endogenous
|
0.2
(1.59)
|
0.1
(0.68)
|
0.24
(2.16)**
|
0.48
(3.09)***
|
0.35
(3.13)***
|
0.3
(1.79)*
|
0.42
(3.56)***
|
0.12
(0.82)
|
|
|
R2
|
0.45
|
|
0.88
|
|
0.94
|
|
0.79
|
|
|
|
Individual
fixed effects
|
Yes
(0.0128)
|
|
Yes
(0.0000)
|
|
Yes
(0.0000)
|
|
Yes
(0.0029)
|
|
|
|
Period fixed
effects
|
No
|
|
No
|
|
No
|
|
No
|
|
|
|
Hansen test
|
|
0.8943
|
|
0.0810
|
|
0.1551
|
|
0.2843
|
|
|
A-B AR(2)
|
|
0.2414
|
|
0.2150
|
|
0.8262
|
|
0.1292
|
|
|
Observations
|
64
|
58
|
64
|
46
|
64
|
58
|
64
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recreation,
culture and religion
|
Education
|
Social
protection
|
|
|
Method
|
OLS
|
GMM
|
OLS
|
GMM
|
OLS
|
GMM
|
|
|
Output gap
|
-0.004
(-0.33)
|
-0.01
(-2.7)**
|
-0.03
(-1.68)*
|
-0.03
(-2.23)**
|
-0.21
(-3.65)***
|
-0.27
(-1.96)*
|
|
|
Lagged
endogenous
|
0.59
(5.08)***
|
0.34
(4.04)***
|
0.72
(9.04)***
|
0.74
(14.52)***
|
0.5
(4.45)***
|
0.23
(0.86)
|
|
|
R2
|
0.92
|
|
0.94
|
|
0.93
|
|
|
|
Individual
fixed effects
|
Yes
(0.0513)
|
|
Yes
(0.0484)
|
|
Yes
(0.0051)
|
|
|
|
Period fixed
effects
|
No
|
|
No
|
|
No
|
|
|
|
Hansen test
|
|
0.0921
|
|
0.0662
|
|
0.4226
|
|
|
A-B AR(2)
|
|
0.3618
|
|
0.5178
|
|
0.1556
|
|
|
Observations
|
64
|
46
|
64
|
58
|
64
|
46
|
|
|
Dependent
variable
|
Independent
variable of interest
|
Controls
|
Source
|
|
education
(ratio of education expenditures to total public expenditures)
health (same) and composition (ratio of education and health expenditures to
total public expenditures).
|
decentralization
(share of local to total exp)
|
Population
population density
age structure
gross domestic product (GDP) per capita
openness to international trade
OECD membership dummy
|
del Granado,
Martinez-Vazquez and McNab. (2018)
|
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expenditure
share in total expenditures
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corruption
convictions
|
log of state
population
the log of real state gross domestic product (GDP) per capita
the percentage of state population aged 25+ with at least a high school
diploma
the percentage of state population between ages 0-17
|
Cordis (2014)
|
|
expenditures
share of total expenditures
|
corruption
perception index
|
interest rate
on government bonds
the population density
the age-dependency ratio
the log of real GDP per capita
and the unemployment rate
regional dummies for the South, the Midwest, and the West
|
Hessami
(2014)
|
|
total
expenditure / COFOG category
|
real GDP in
national currency
election years
|
lagged
dependent
population
openness
the age structure (share of young and elderly in total population)
unemployment rate growth rate of total expenditures
|
Enkelmann and
Leibrecht (2013)
|
|
Expenditure
(share of GDP)
|
ln(population)
ln(GDP per capita)
openness
OECD membership
index of ethnic fractionalization
fraction of population over 65
|
|
Ferreiro,
Garcia-Del-Valle and Gomez (2009)
|
|
government
transfers to households
|
party linkage
|
lagged
dependent
age
unemployment
total expenditures
federalism dummy
district magnitude
|
Lago-Peñas and
Lago-Peñas (2009)
|
|
education
expenditures
|
corruption
index
|
|
Mauro (1998)
|
Source: Authors’ literature review.
|
Variable
|
Definition
|
Description
|
Source
|
|
PGGA
|
Public goods and
general administration
|
Aggregation of General public services,
Defence, Public order
and safety, and Environmental protection, measured in
GDP %
|
National Financial Institutions,
Eurostat
|
|
SE
|
Social expenditure
|
Aggregation of Housing and community
amenities, Health, Recreation,
culture and religion and Social protection,
measured in GDP %
|
National Financial Institutions,
Eurostat
|
|
PE
|
Productive expenditure
|
Aggregation of Economic affairs and
Education, measured in GDP %
|
National Financial Institutions,
Eurostat
|
|
ELECTIONS
|
Parliamentary elections
|
Dummy variable taking value of 1 for
parliamentary election year,
and 0 for other
|
National Election Commissions
|
|
PARTY_NAT
|
Party nationalization
index
|
The party nationalization index calculated
as per Bochsler (2010), where
politically decentralized countries are
described with a lower index value
|
National Election Commissions
|
|
CORRUPT
|
Corruption perception
index
|
The corruption perception index, where
less corrupt countries are
described by a higher index value
|
Transparency International
|
|
GDPEUR
|
Gross Domestic Product
|
Gross Domestic Product in millions of
euros, at current market prices
|
Eurostat
|
|
OPEN
|
Trade openness
|
Trade openness index, where higher values
are described for more
open economies
|
Eurostat
|
|
UNEM
|
Unemployment rate
|
Percentage of population aged over 15
years that is unemployed
|
International Labour Organization
|
|
TOTEXP
|
Total expenditures
|
Total expenditures, measured in GDP %
|
National Financial Institutions,
Eurostat
|
|
Variable
|
Mean
|
Median
|
Std. dev.
|
Maximum
|
Minimum
|
Observations
|
|
PGGA
|
10.71
|
9.94
|
2.97
|
19.35
|
6.8
|
70
|
|
PE
|
10.2
|
10.06
|
2.67
|
21.7
|
5.3
|
70
|
|
SE
|
22.94
|
23.38
|
3.14
|
29.1
|
17.8
|
70
|
|
ELECTIONS
|
0.27
|
0
|
0.45
|
1
|
0
|
70
|
|
PARTY_NAT
|
0.8
|
0.8
|
0.11
|
0.92
|
0.54
|
70
|
|
CORRUPT
|
4.55
|
4.2
|
0.94
|
6.7
|
3.2
|
70
|
|
GDPEUR
|
26,949.2
|
34,376.4
|
16,582.47
|
54,237.9
|
3,125.1
|
70
|
|
OPEN
|
1.07
|
1.03
|
0.23
|
1.61
|
0.66
|
70
|
|
UNEM
|
16.59
|
16.16
|
7.8
|
32.18
|
4.37
|
70
|
|
TOTEXP
|
43.85
|
44.91
|
5.28
|
60.3
|
33.1
|
70
|
|
SE
|
PE
|
|
C
|
12.8484
(2.1)**
[1.67]
|
-32.065
(-3.2)***
[-2.62]**
|
|
ELECTIONS
|
0.498
(2.25)**
[2.09]**
|
-0.3541
(-0.98)
[-0.83]
|
|
PARTY_NAT
|
16.8527
(3.49)***
[3.21]***
|
-4.8893
(-0.62)
[-0.56]
|
|
CORRUPT
|
-0.3769
(-1.2)
[-1.13]
|
0.2448
-0.48
[0.46]
|
|
GDPEUR
|
-0.0001
(-1.66)
[-1.88]*
|
0.0001
-0.92
[1.28]
|
|
OPEN
|
-0.8379
(-0.39)
[-0.38]
|
0.1487
-0.04
[0.05]
|
|
UNEM
|
-0.1432
(-3.05)***
[-3.17]***
|
0.2187
(2.84)***
[2.46]**
|
|
TOTEXP
|
0.0992
(2.09)**
[1.94]*
|
0.8844
(11.39)***
[10.77]***
|
|
Observations
|
70
|
70
|
|
Individual fixed effects
|
>0.0001
|
>0.0001
|
|
Period fixed effects
|
>0.0001
|
0.003
|
|
B-G test
|
0.66
|
0.16
|
|
R-squared
|
0.97
|
0.91
|
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June, 2023
II/2023
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