Evaluation Structure of Local Public Expenditures in the European Union Countries

Abstract

The public sector plays a significant role in securing public needs in a number of countries. The paper aims to evaluate the local public sector by the structure of local public expenditures, emphasizing similarities and differences in EU countries. Attention is paid to the evaluation of local public expenditures by eight functions (general public services, public order and safety, economic affairs, housing and community amenities, recreation and culture, social protection, health, education) in years 2005 and 2015. Local public expenditures by function in the EU are evaluated in connection to lower government levels and fiscal decentralization of expenditures. The evaluation shows that no countries demonstrate similarity of local public expenditures by function, which is associated also with an identical size of fiscal decentralization of expenditures and the number of lower government levels. By contrast, both similarities and differences were proved with respect to the evaluated local public expenditures by the application of multidimensional scaling and cluster analysis. The results have shown that Scandinavian countries represent the most marked differences in the structure of local public expenditures, in comparison to Malta and Cyprus in terms of local public expenditures on social protection, health and education.

Keywords

• public finance
• public expenditure
• local public expenditure by function
• evaluation
• EU countries
• multidimensional scaling