Nexus between Globalization and Public Expenditure Components: Case of EU Countries

Year 2020, Volume: 4 Issue: 3, 807 - 819, 30.09.2020

Orhan Cengiz , Müge Manga

https://doi.org/10.29023/alanyaakademik.658540

Cited By: 3

Abstract

Privatizations were accelerated to reduce share of state in economy and to activate market mechanism since 1980s. Thereby, globalization has exposed countries options that reducing public sector and expanding markets, on the other hand, liberalizing policies that are applied in the economic and financial fields, especially in tax competition to adapt globalization bring significant burdens on public budget and affect composition of public expenditures significantly. From this point of opinion, impact of globalization on general public services, defense expenditures, public order and safety, education, health and social protection expenditures which are sub-components of public expenditures is examined for 28 EU countries. Using by panel ARDL method over the years between 2001 and 2017, results show that while globalization positively affects public order and safety, education, health and social protection expenditures, negatively affects general public services and defense expenditures.

Keywords

Globalization, State, public expenditure, Panel data

Küreselleşme ve Kamu Harcamaları Bileşenleri Arasındaki İlişki: AB Ülkeleri Örneği

Abstract

1980’lerden itibaren devletin ekonomideki payının azaltılması ve piyasa mekanizmasına işlerlik kazandırılması amacıyla özelleştirmelere hız verilmiştir. Küreselleşme bir yandan, ülkeleri kamu sektörünün payını azaltma ve piyasaları genişletme seçeneği ile karşı karşıya bırakırken diğer taraftan küreselleşmeye uyum sağlamak amacıyla vergi rekabeti başta olmak üzere ekonomik ve mali alanda yapılan serbestleştirici politikalar kamu bütçesine önemli yükler getirmekte ve kamu harcamalarının kompozisyonunu önemli derecede etkilemektedir. Bu düşünceden hareketle 28 AB ülkesi için küreselleşmenin kamu harcamalarının alt bileşenleri olan genel kamu hizmetleri, savunma harcamaları, kamu düzeni ve güvenlik, eğitim, sağlık ve sosyal koruma harcamaları üzerindeki etkisi incelenmiştir. Panel ARDL yönetimi kullanılarak 2001-2017 dönemi verileriyle yapılan analiz sonuçlarına göre küreselleşme, kamu düzeni ve güvenlik, eğitim, sağlık ve sosyal koruma harcamalarını pozitif yönde etkilerken genel kamu hizmetleri ve savunma harcamalarını ise negatif yönde etkilemektedir.

Keywords

küreselleşe, devlet, kamu harcamaları, panel veri

References

• BRADY, D., BECKFIELD, J. & SEELEIB-KAISER, M. (2005). “Economic Globalization and The Welfare State in Affluent Democracies, 1975–2001”. American Sociological Review, 70(6): 921-948.
• BUSEMEYER, M. R. (2009). “From Myth to Reality: Globalisation and Public Spending in OECD Countries Revisited”. European Journal of Political Research, 48: 455–482.
• CAMERON, D. R. (1978). “The Expansion of the Public Economy: A Comparative Analysis”. The American Political Science Review, 72(4): 1243-1261.
• DREHER, A., STURM, J. E. & URSPRUNG, H. W. (2008). “The Impact of Globalization on the Composition of Government Expenditures: Evidence From Panel Data”. Public Choice, 134(3-4): 263-292.
• GARRETT, G. (2001). “Globalization and Government Spending Around The World”. Studies in Comparative International Development, 35(4): 3-29.
• GYGLI, S., HAELG, F., POTRAFKE, N., & STURM, J. E. (2019). “The KOF Globalisation Index-Revisited”. Review of International Organizations, 14(3): 543-574.
• HA, E. (2008). “Globalization, Veto Players, And Welfare Spending”. Comparative Political Studies, 41(6): 783-813. https://data.worldbank.org/indicator, 21.11.2019.
• https://ec.europa.eu/eurostat/data/database, 18.11.2019.
• https://unctadstat.unctad.org/wds/TableViewer/tableView.aspx, 18.11.2019.
• KATZENSTEIN, P. J. (1985). Small States in World Markets: Industrial Policy in Europe. Cornell University Press, Ithaca & London.
• KIM, S. Y. (2007). “Openness, External Risk, and Volatility: Implications for The Compensation Hypothesis”. International Organization, 61(1): 181-216.
• KIM, T. K. & ZURLO, K. (2009). “How Does Economic Globalisation Affect The Welfare State? Focusing on The Mediating Effect of Welfare Regimes”. International Journal of Social Welfare, 18(2): 130-141.
• IM, K., PESARAN, M.H. & SHIN, Y. (2003). “Testing for Unit Roots in Heterogeneous Panels”. Journal of Econometrics, 115(1): 53-74.
• QUINN, D. (1997). “The Correlates of Change in International Financial Regulation”. American Political Science Review, 91(3): 531-551.
• NAZLIOĞLU, Ş. (2011). “Tarımsal Fiyatlarda Hedefi Aşma Hipotezi: Gelişmiş ve Gelişmekte Olan Ülkeler İçin Panel ARDL Analizi”. Finans Politik & Ekonomik Yorumlar, 48(556): 67-80.
• PESARAN, M. H. (2007). “A Simple Panel Unit Root Test in The Presence of Cross‐Section Dependence”. Journal of Applied Econometrics, 22(2): 265-312.
• RODRIK, D. (1996). “Why Do More Open Economies Have Bigger Governments?”. NBER Working Paper Series, Working Paper 5537: 1-27.
• RODRIK, D. (2011). Akıllı Küreselleşme, Burcu Aksu (Çev). Efil Yayınevi, Ankara.
• SANZ, I. & VELÁZQUEZ, F. J. (2003). “Does Globalization Increase Government Size? An Analysis of The Effects of Foreign Direct Investment on Total Government Expenditures and Its Components”. European Economy Group-UCM and FUNCAS, 1-19.
• SHAHBAZ, M., REHMAN, H. U. & AMIR, N. (2010). “The Impact of Trade and Financial-Openness on Government Size: A Case Study of Pakistan”. Journal of Quality and Technology Management, 6(1): 105-118.
• SWANK, D. (2002). Global Capital, Political Institutions and Policy Change in Developed Welfare States. Cambridge University Press, Cambridge.
• WU, T. P., FAN, D. & CHANG, T. (2016). “The Relationship Between Globalization and Military Expenditures in G7 Countries: Evidence From A Panel Data Analysis”. Economic Computation & Economic Cybernetics Studies & Research, 50(3): 285-302.