Record details

Title:Institutional Determinants of Budgetary Expenditures. A BMA-Based Re-Evaluation of Contemporary Theories for OECD Countries
Author:Beck Krzysztof
Możdżeń Michał
Release date:18/05/2020
Knowledge area:Mechanisms of collective action management
Keywords:



Publisher:MDPI
Journal name:Sustainability
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.

DOI:https://doi.org/10.3390/su12104104
ISSN/ISBN:

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