Analysis of the Relationship between the Size and Structure of Public Expenditure and Socio-economic Development
Analysis of the Relationship between the Size and Structure of Public Expenditure and Socio-economic Development

Summary/Abstract: The relation between the levels of public expenditure and their impact on economic growth and socio-economic development is long-term issue investigated by the public finance theory. Relevant answers to it are also of great importance for economic practice. The aim of the present study is to analyse the relation between the levels and structures of public expenditures and the Human Development Index. The study uses the Data Envelopment Analysis (DEA) to identify countries that effectively use public spending to achieve the highest socio-economic development of society. The findings indicate that the total amount of public expenditure does not have significant impact on the socio-economic development; however public expenditures in “productive” sectors of public services (especially education, health and social services) have the potential of positive impact on the socio-economic development.

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