EconPapers    
Economics at your fingertips  
 

Institutional Determinants of Budgetary Expenditures. A BMA-Based Re-Evaluation of Contemporary Theories for OECD Countries

Krzysztof Beck () and Michał Możdżeń ()
Additional contact information
Krzysztof Beck: Department of Econometrics, Lazarski University in Warsaw, 02-662 Warszawa, Poland
Michał Możdżeń: Department of Public Policy, Cracow University of Economics, 31-510 Kraków, Poland

Sustainability, 2020, vol. 12, issue 10, 1-31

Abstract: The article tackles the problem of the most important institutional determinants of public expenditures. Within the traditions of public choice and institutional economics, it tests several theories ranging from the fiscal commons framework, Political Business/Budget Cycle (PBC) and path dependence to veto players theory. Its novelty compared to previous research stems from an attempt to test several theories simultaneously, dealing with model uncertainty by using sensitivity analysis within the Bayesian Model Averaging framework with a vast prior structure in terms of model, g and multicollinearity dilution priors. The results confirm several hypotheses tested in the area of fiscal management across the recent decades within the group of developed economies, giving especially strong support to the tragedy of the fiscal commons and path dependence concepts, while only partial support to veto players theory. In contrast, explanations based on political budget cycle (PBC) theory are dismissed. Among other interesting findings reported in the study, Scandinavian countries turn out to be the most fiscally responsible when other institutional factors are taken into account. Similarly, contrary to other recent research into the issue of EU fiscal institutional framework, Euro area countries are characterized by limited public expenditures.

Keywords: Bayesian model averaging; fiscal commons; fiscal rules; Government expenditures; political institutions (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.mdpi.com/2071-1050/12/10/4104/pdf (application/pdf)
https://www.mdpi.com/2071-1050/12/10/4104/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:10:p:4104-:d:359452

Access Statistics for this article

Sustainability is currently edited by Prof. Dr. Marc A. Rosen

More articles in Sustainability from MDPI, Open Access Journal
Bibliographic data for series maintained by XML Conversion Team ().

 
Page updated 2020-08-12
Handle: RePEc:gam:jsusta:v:12:y:2020:i:10:p:4104-:d:359452