The quality of public finance in the light of fiscal governance concept: implications for the European Union countries

Aneta Kargol-Wasiluk () and Anna Wildowicz-Giegiel ()
Additional contact information
Aneta Kargol-Wasiluk: University of Bialystok, Poland
Anna Wildowicz-Giegiel: University of Bialystok, Poland

Equilibrium. Quarterly Journal of Economics and Economic Policy, 2018, vol. 13, issue 3, 411-426

Abstract: Research background: The research area on the quality of public finance (QPF) appears to be intellectually attractive. In the light of the challenges of the 21st century, public finance should be characterized by adequate quality, ensuring effective implementation of the economic functions of government. The problem of QPF is increasingly more frequent in the face of a deteriorating fiscal situation of most countries in Europe and around the world. Hence, it is worth considering which factors determine the quality of public finance. Purpose of the article: This article aims to show the possibility of assessing the quality of public finance in the light of fiscal governance concept. The identification of the key components of QPF seems to be useful from the point of view of empirical research, and can be implemented to assess the quality of public finance in the EU–28. Methods: Descriptive analysis along with principal component analysis (PCA) was implemented to indicate dimensions of QPF. Findings & Value added: The quality of public finance consists of a well-designed fiscal rules (numerical and non-numerical) and institutions, as well as structural reforms. The obtained results allow to characterize the quality of public finance through the prism of six identified principal components. They have a mixed character, two of them are partly or totally related to the institutional aspects of public finance, which proves their importance in the process of improving the quality of public finance. Improving the quality of public finance remains a key challenge for policy makers in the EU. The growing impact of globalization and the aging population also cause the need to improve the qualitative aspects of fiscal policy. The study contributes to the literature on public finance, particularly in the empirical dimension through broadening the knowledge on institutional factors which can be used to measure QPF index. The results of research have certainly enriched the existing knowledge on the phenomenon of QPF and the ways of its measurement.

Keywords: public finance; quality; fiscal governance; principal component analysis (search for similar items in EconPapers)
JEL-codes: H30 H60 H62 H63 H87 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.24136/eq.2018.020 (application/pdf)

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:pes:ierequ:v:13:y:2018:i:3:p:411-426

Access Statistics for this article

Equilibrium. Quarterly Journal of Economics and Economic Policy is currently edited by Adam P. Balcerzak

More articles in Equilibrium. Quarterly Journal of Economics and Economic Policy from Institute of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Adam P. Balcerzak ( this e-mail address is bad, please contact ).