Econometric modeling of efficiency and sustainability of public expenditure in European countries

Social sciences / econometricsU ovom radu se analizira fiskalna održivost, uticaj javne potrošnje na produbljivanje fiskalnog deficita i efikasnost politika javne potrošnje u 28 ekonomija Evropske Unije u periodu 1995-2014. godine, u okviru ekonometrijskih metoda nestacionarnih heterogenih panela, sa zavisnošću uporednih podataka. Fiskalna održivost je analizirana objedinjenjem pristupa o fiskalnoj održivosti zasnovanog na varijablama toka i pristupa na bazi modela stok-tok sa ciljem da se istraži drugi sloj kointegracije između javnog duga i javne potrošnje. Kako bi se obuhvatili heterogeni parametri i zavisnost po uporednim podacima u analiziranom uzorku panela, korišćen je metod (združenih) grupnih sredina i metodi sa zajedničkim korelisanim faktorima. Rezultati kointegracione analize upućuju da postoji slaba održivost, dok rezultati multikointegracionog pristupa pružaju heterogenu evidenciju o dubljoj kointegraciji, izdvajajući grupe ekonomija u kojima fiskalne vlasti prilagođavaju javnu potrošnju kako bi stabilizovale javni dug, u odnosu na ad hoc promene javne potrošnje. Pri istraživanju uticaja politika javne potrošnje na fiskalni deficit, upoređivani su rezultati dobijeni u klasičnim modelima panela prilagođenim kako bi obuhvatili uslovnu heterogenost i nestacionarnost, sa novim metodama zasnovanim na pristupu sa zajedničkim korelisanim faktorima. Dijagnostički testovi pokazuju da su preferabilni metodi koji obuhvataju neidentifikovane zajedničke faktore i zavisnost uporednih podataka. Determinante koje doprinose i remete fiskalnu ravnotežu su identifikovane, pri čemu u homogenom i heterogenom modelu izdaci za penzije predstavljaju važan remetilački faktor. U zemljama u kojima nije značajno faktorsko opterećenje, nije značajno ni prilagođavanje ravnotežnoj vezi, niti uticaj politika javne potrošnje na fiskalni deficit, upućujući da je pridržavanje fiskalnog okvira EU ključni faktor održivosti. Analiza efikasnosti diskrecionih mera na području politika socijalnog osiguranja, zdravstva i obrazovanja pri ispunjenju postavljenih ciljeva, ukazuje da postoji izražena heterogenost među članicama EU. Rezultati se ne mogu uopštiti za grupe evropskih zemalja (stare članice/emergentne ekonomije Evrope), jer postoje veće sličnosti između definisanih grupa, nego unutar grupa. Ispostavlja se da pristupanje EU ne znači automatsko poboljšanje u fiskalnoj politici, ali su pozitivna iskustva u kontekstu najbolje prakse zabeležena u određenim emergentnim ekonomijama Evrope.This paper analyzes fiscal sustainability, public expenditure influence on fiscal deficit deepening and efficiency of public expenditure policies in 28 countries of the European Union in the period 1995-2014, within econometric framework of nonstationary heterogeneous panels with cross-sectional dependence. Fiscal sustainability is analyzed by unifying the approach for fiscal sustainability testing based on flow variables, and the approach based on stock-flow models, with the aim to investigate second layer of cointegration, between public debt and public expenditure. In order to obtain heterogeneous parameters and cross-sectional dependency in analyzed sample, (pooled) mean group and common correlated factors approach are used. The results of cointegration analysis point to weak sustainability, while results of multicointegration approach provide heterogeneous evidence of deeper cointegration, distinguishing groups of economies in which fiscal authorities adjust their public expenditure in order to stabilize public debt, relative to ad hoc changes in public expenditures. In exploring public expenditure influence on fiscal deficit, we compared the results obtained by standard panel estimators modified to encompass restricted heterogeneity and nonstationarity, and results obtained by using estimators from common correlated factors approach. Diagnostic tests showed that preferable estimators are those which account for unobserved common factors incorporating cross-section dependence. The determinants which contribute and disturb fiscal balance are identified. According to the main findings of the paper pension expenditure is important disturbance factor. In economies with nonsignificant factor loadings, fiscal adjustment is not significant, nor public expenditure influence on fiscal deficit, indicating that compliance with EU fiscal framework is crucial factor of fiscal sustainability. Analysis of discretionary measures efficiency in the area of social insurance, health and education policies in meeting goals, indicates that there is a significant heterogeneity among the EU member states. The results could not be generalized to the groups of European countries (old members/emerging European economies), because there are more similarities between defined groups than within groups. It turns out that joining the EU does not automatically improve fiscal policy, but the positive experiences in the context of best practices are observed in certain emerging European economies