Elina De Simone, Mariangela Bonasia, Giuseppe Lucio Gaeta and Lorenzo Cicatiello
Making citizens able to monitor and evaluate public spending activities is a fundamental issue in public financial management literature. The purpose of this paper is to analyze…
Abstract
Purpose
Making citizens able to monitor and evaluate public spending activities is a fundamental issue in public financial management literature. The purpose of this paper is to analyze whether fiscal transparency, measured by the Open Budget Index, has an effect on public spending performance, measured by the World Economic Forum’s Global Competitiveness Report data.
Design/methodology/approach
Research methods rely on random-effects panel regression models on a country-level panel data set of 82 world countries observed in the 2008–2015 time interval.
Findings
Results show that the potential positive effects of fiscal transparency are mediated by the level of democracy of the country. In detail, in democratic countries, a higher degree of disclosure of fiscal information is correlated with a higher efficiency of government spending while, in non-democratic countries, fiscal transparency does not seem to provide any effect.
Social implications
The results suggest that fiscal transparency can be a powerful device where politicians can be held accountable for their actions, while it could fail to provide positive results where a strong and effective vertical accountability is missing.
Originality/value
The novelty of the paper is twofold. First, it provides new additional evidence about the positive effect that fiscal transparency has on public spending efficiency by advancing previous research on this topic (Porumbescu, 2017; Montes et al., 2019). Second, the paper investigates conceptually and empirically how the positive effect on public spending efficiency determined by fiscal transparency depends on the degree of democracy present in the institutional environment in which fiscal information disclosure is implemented.
Details
Keywords
Mariangela Bonasia and Rosaria Rita Canale
The aim of this chapter is to show the limits of the European policy model and to support the existence, through straightforward empirical analysis, of an inverse relationship…
Abstract
The aim of this chapter is to show the limits of the European policy model and to support the existence, through straightforward empirical analysis, of an inverse relationship both in the short run and in the long run between trust in institutions and unemployment. The empirical methodology relies on dynamic panel data techniques allowing measuring in a single equation both the long-run relationship and the short-run speed of adjustment among variables. This connection appears to be valid both in the Eurozone considered as a whole and in particular in peripheral countries, where the macroeconomic dynamics have been, under this respect, much more divergent from the average. This outcome allows proofing that to consolidate the European process of integration in the long run, institutions should have as main objective not only inflation but especially unemployment.