 Social expenditure cyclicality: New time-varying evidence in developing economiesEconomic Systems, 2020, vol. 44, issue 3 Abstract: This paper provides a novel dataset of time-varying measures of cyclicality in social spending for an unbalanced panel of forty-five developing economies from 1982 to 2012. We focus on four categories of government social expenditure: health, social protection, pensions, and education. We find that in developing countries social spending has been acyclical over time, with the exception of spending on pensions. However, sample averages hide marked heterogeneity across countries, with many individually showing procyclical behavior in different social spending categories. The use of time-varying measures of social spending cyclicality overcomes the major limitation of previous studies in assessing the drivers of fiscal cyclicality that rely solely on cross-country regressions and, therefore, cannot account for country-specific as well as global factors. Using weighted least squares regressions, we find that the degree of social spending (pro)cyclicality is negatively associated with financial deepening, the level of economic development, trade openness, government size, and political constraints on the executive. Keywords: Education; Health; Panel data pensions; Time-varying coefficients; Weighted least squares (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:44:y:2020:i:3:s0939362518302693 DOI: 10.1016/j.ecosys.2020.100810 Access Statistics for this article Economic Systems is currently edited by R. Frensch More articles in Economic Systems from Elsevier Contact information at EDIRC. |
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