The Size and Composition of Government Spending in Europe and Its Impact on Well-Being
Zohal Hessami ()
Kyklos, 2010, vol. 63, issue 3, pages 346-382
This paper empirically analyzes whether large governments in Europe reflect efficient responses to a changing social and economic environment ('welfare economic view') as opposed to wasteful spending ('public choice view'). To this end, the effect of government size on subjective well-being is estimated in a combined survey and country-level dataset covering 153,268 respondents from twelve EU countries over the 1990-2000 period. The first finding is an inversely U-shaped relationship between government size and well-being. In addition, the analysis suggests that given the high institutional quality as compared to other parts of the world there might be scope for a further enlargement of governments in the EU from a well-being perspective. However, one must acknowledge that the effect on well-being may be quite small and that democratic societies in Europe have no experience with even larger governments. The investigation also reveals that the impact of government size on well-being depends negatively on levels of corruption and positively on the extent of decentralization. Moreover, left-wing voters and low-income earners are the main beneficiaries of a large public sector. Finally, in all twelve EU countries included in the sample higher levels of well-being could have been achieved by allocating a higher share of public resources to education, while Finland and Germany could have given an additional boost to well-being by cutting expenditures on social protection. Copyright © 2010 Blackwell Publishing Ltd..
References: Add references at CitEc
Citations View citations in EconPapers (11) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/links/doi/10.1111/j.1467-6435.2010.00478.x link to full text (text/html)
Access to full text is restricted to subscribers.
Working Paper: The Size and Composition of Government Spending in Europe and Its Impact on Well-Being (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bla:kyklos:v:63:y:2010:i:3:p:346-382
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0023-5962
Access Statistics for this article
Kyklos is currently edited by Rene L. Frey
More articles in Kyklos from Wiley Blackwell
Series data maintained by Wiley-Blackwell Digital Licensing ().