Marko Crnogorac and Santiago Lago-Peñas, from the Governance and Economics Research Network, University of Vigo, Spain, on 29th September 2023, gave a lecture based on the article on COFOG expenditures in former Yugoslavian countries published in the journal Public Sector Economics. 

Their extensive research has covered three aspects of public expenditures in former Yugoslavian countries. First, the convergence analysis confirmed that public expenditures between 2011 and 2019 diverged in terms of dynamic, static, and structural aspects. Nevertheless, the analysis of the sensitivity of public expenditures to the economic cycle confirmed that public spending was countercyclical in all these countries between 2005 and 2019, with health, education, and social protection expenditures driving the results. The countercyclicality can be explained by automatic stabilisers and the rigidity of expenditures. Lastly, the analysis of determinants of COFOG expenditure aggregates showed several intriguing results: social expenditures are increased in election years, are expected to grow in less diverse party systems, and are decreased in economies characterised by a growing GDP and shrinking unemployment.

The authors concluded that specific expenditure categories have been identified as the main tools in the hands of policymakers, requiring a more detailed analysis. Putting more emphasis on the effects of public spending would help achieve the necessary discipline and discover how resource allocation can be optimised.

The presentation was moderated by Dubravko Mihaljek, from the Bank for International Settlements, Basel, Switzerland, co-editor of the Public Sector Economics journal. 

A recording and a presentation of this interesting lecture are also available.