THE IMPACT OF EU ECONOMIC GOVERNANCE ON THE COMPOSITION OF PUBLIC EXPENDITURES IN THE MEMBER STATES
Tesi di Dottorato
Data di Pubblicazione:
2021
Citazione:
THE IMPACT OF EU ECONOMIC GOVERNANCE ON THE COMPOSITION OF PUBLIC EXPENDITURES IN THE MEMBER STATES / M. Ceron ; supervisor: F. Franchino; phd director: M. Jessoula. Dipartimento di Scienze Sociali e Politiche, 2021 Jul 21. 33. ciclo, Anno Accademico 2020. [10.13130/ceron-matilde_phd2021-07-21].
Abstract:
The work sheds light on the largely under-investigated puzzle of the distributional impact of EU economic governance on the budget structures of the Member States. The overarching research question is: Is the impact of the Stability and Growth Pact neutral to the composition of domestic public spending?
In addressing the EU-MS fiscal puzzle the thesis considers three main research questions:
1. when and how the SGP affects the composition of national budgets.
2. if and how the SGP has affected the domestic composition of public expenditures
during the Great Recession and Eurozone crisis.
3. if and how the impact of the SGP changes across different domestic political,
institutional and economic conditions.
The thesis brings together the literature of the domestic determinants of national fiscal policy with that on the Economic and Monetary Union. Firstly, the disaggregate assessment of where the bite of the EU economic governance framework lands back at home sheds some light on how the Pact fulfils its policy objectives of promoting at the same time fiscal discipline and inclusive growth. Within this context, it contributes to the rich debate on the subordination of social objectives to economic ones at the hand of the EU fiscal surveillance regulatory framework. At the same time, it evaluates the claim of a detrimental effect of the Pact on investment and growth, linked to the lengthening and worsening of the severe downturn in the context of the Great Recession and Eurozone crisis, as well as the divergence between core and periphery.
Building on the well-established findings on the interplay between (national) fiscal rules and the political, institutional, and economic context the analysis provides a causal empirical assessment over the panel of the EU28 from 1995 to 2018 of whether and under which conditions the EU economic governance framework impacts the structure of the budgets of the Member States.
In considering both a synthetic indicator of changes to the budget structure, disaggregated impact on all budget lines (e.g. health, education, social protection, etc.), and on broad components associated with investments, transfers, and the mitigation of inequalities, the analysis provides a rare comprehensive picture of which elements are affected at all and where comparatively the highest toll emerges within the components of national spending.
The main results are the following:
• EU economic governance is far from being neutral in affecting the budget
structure of the Member States;
• Its impact on the national fiscal policy mix is heterogeneous over time -
increasing substantially with the latest wave of reform - and scope, limited predominantly to Eurozone countries under EDP surveillance and aligning quite poorly with prescriptions of the CSRs;
• Budgetary dynamics do not escape the bind of the EDP in times of crisis, rather the framework is the most impactful in such circumstances, generating substantial spending restructuring which is both pro-cyclical and detrimental for inclusive growth, as well as for geographical convergence;
• Heterogeneity in the effect of the Pact extends to domestic circumstances, with political characteristics of the government (e.g. small budget distances, high alternation) and a unitary institutional structure as a precondition for any impact to materialise, while in the economic domain, alike for the crisis, the restraint of the SGP materialises especially in countering expansionary pressures such as those of ageing and unemployment.
Findings refute the widespread argument within the literature of a limited impact of the supranational fiscal governance framework given the poor track record of compliance with the deficit targets of the Stability and Growth P
Tipologia IRIS:
Tesi di dottorato
Keywords:
European Union; economic governance; Stability and Growth Pact; Economic and Monetary Union;
Elenco autori:
M. Ceron
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