Naslov (srp)

Determinants of variation in public investment in emerging Europe

Autor

Ranđelović, Saša

Opis (eng)

Abstract Purpose – This paper evaluates the economic, political and institutional determinants of variation in public investment in emerging Europe. Design/methodology/approach – Panel econometrics (panel-corrected standard error, generalized least squares and the two-stage least squares) methods have been applied using annual data from 2000 to 2017 for 16 countries from Central and Eastern Europe (CEE). Findings – Public investment was procyclical in relation to output and negatively associated with the level of public debt. Austerity episodes triggered a significant drop in public investment. Positive drifts in public investment during election periods and the negative impact of the number of cabinet seats held by left-wing parties have been captured. While no firm evidence on the impact of EU membership was found, the results show that arrangements with the IMF were strongly associated with lower public investment. Political factors were of greater importance in Central Europe and the Baltics, while institutional factors had a more significant impact in South Eastern Europe. Practical implications – To foster public capital formation, it is necessary to: 1) strengthen the countercyclicality of public investment policy and to keep public debt at a low level; 2) adjust the fiscal criteria for EU membership in a manner that would enable countries to use the EU structural fund more effectively, while maintaining fiscal sustainability; 3) put a stronger emphasis on structural features of fiscal policy when designing country-level arrangements with the IMF. Originality/value – The paper contributes to the literature on determinants of public investment policy by adding empirical evidence for emerging Europe countries

Opis (eng)

This article is the result of research conducted under the LSEE Visiting Fellowship Programme at the LSE European Institute – Research on South Eastern Europe.

Jezik

engleski

Datum

2021

Licenca

© All rights reserved

Predmet

Keywords Public investment, Fiscal policy, Central and Eastern Europe

Deo kolekcije (1)

o:28218

Ekonomski fakultet