Political determinants of social expenditures in Greece: an empirical analysis

Abstract

A view prominently expounded is that the interaction between the composition and the volume of public expenditures is directly affected by political, institutional, psephological and ideological indicators. A crucial component of public expenditures, social expenditures play an important role in the economy as they directly and indirectly affect the distribution of income and wealth. Social expenditures aim at reallocating income and wealth unequal distribution. These expenditures comprise cash benefits, direct in-kind provision of goods and services, and tax breaks with social purposes. The aim of this study is to determine the relationship between political structure, i.e. government fragmentation, ideological composition, elections and so on, and the social expenditures in Greece. Employing data from the Comparative Political Dataset (CPDS) and the OECD Social Expenditure Database (SOCX), a time series analysis was conducted for Greece for the 1980-2014 period. The findings of the study indicate that voter turnout, spending on the elderly population and the number of government changes have positive and statistically significant effects on social expenditures in Greece while debt stock and cabinet composition have negative effects.