Stability and Growth Pact Reform and Public Expenditure Structure in the European Union Member States

Abstract

This paper studies the problems of convergent and divergent tendencies in the functional allocation and structure of public expenditure in the EU Member States and the effect of the Stability and Growth Pact reform of year 2011 on them. The study is based on sigma convergence analysis. The dispersion between the countries is measured via the coefficient of variation. The dispersion is calculated as an average value for each of the two periods under examination - before and after the reform of the Stability and Growth Pact. The empirical results show that the reform leads to greater convergence between the Member States in terms of the structure of public expenditure.