Table 2 Estimated error-correction model: long-run and short-run dynamics of social expenditure and its determinants

Social expenditure (t − 1)

− 0.0338** (0.0133)

− 0.269*** (0.0616)

− 0.0394*** (0.0110)

− 0.299*** (0.0378)

− 0.0989*** (0.0204)

− 0.190*** (0.0433)

− 0.104*** (0.0186)

Fiscal burden (t − 1)

0.0340* (0.0185)

0.103 (0.0704)

0.0388 (0.0299)

0.107* (0.0587)

0.0363 (0.0293)

0.120** (0.0572)

0.0403 (0.0307)

Fiscal burden growth

0.0927 (0.0770)

0.0941 (0.0644)

0.100 (0.0755)

0.0906 (0.0661)

0.0871* (0.0510)

0.0541 (0.0722)

0.135** (0.0598)

Per capita income

− 0.0105 (0.0109)

− 0.238* (0.117)

− 0.00928 (0.0184)

− 0.169** (0.0846)

− 0.00159 (0.0168)

0.0294 (0.0322)

0.0191 (0.0228)

(GDPpc) (logged) (t − 1)

Per capita income growth

0.0990 (0.222)

− 0.0245 (0.272)

0.0955 (0.195)

− 0.0170 (0.177)

0.0625 (0.142)

0.449* (0.250)

− 0.402*** (0.143)

Trade (% GDP) (t − 1)

0.00187 (0.0130)

− 0.0334 (0.0473)

0.00294 (0.0110)

− 0.0354 (0.0365)

− 0.00278 (0.0115)

0.00932 (0.0166)

− 0.00247 (0.0164)

Trade growth

− 0.0999* (0.0495)

− 0.123*** (0.0408)

− 0.102 (0.0776)

− 0.115** (0.0573)

− 0.112** (0.0454)

− 0.0610 (0.0633)

− 0.163*** (0.0592)

Foreign direct investment flows (%GNI) (t − 1)

0.00452 (0.00403)

0.00780** (0.00362)

0.00506 (0.00726)

0.000822 (0.00864)

0.00857 (0.00734)

0.0216 (0.0154)

0.0120 (0.00758)

Foreign direct investment growth

0.0203** (0.00934)

0.0159* (0.00875)

0.0202** (0.00939)

0.0121 (0.00780)

0.0200*** (0.00661)

0.0325*** (0.0112)

0.0155** (0.00728)

External debt (%GNI) (t − 1)

− 0.0239** (0.00996)

− 0.0353* (0.0190)

− 0.0253 (0.0185)

− 0.0567*** (0.0189)

− 0.0328** (0.0141)

− 0.0841** (0.0346)

− 0.0104 (0.0184)

External debt growth

− 0.0138 (0.0253)

0.0138 (0.0324)

− 0.0107 (0.0471)

− 0.00987 (0.0372)

− 0.0103 (0.0303)

− 0.0879* (0.0496)

0.0375 (0.0358)

Interest payments on debt

(t − 1)

0.0154 (0.0134)

− 0.0165 (0.0180)

0.0148 (0.0130)

− 0.0204 (0.0155)

0.00860 (0.00999)

− 0.0169 (0.0219)

0.00616 (0.0114)

Interest payments on debt growth

− 0.0351 (0.0202)

− 0.0391 (0.0231)

− 0.0328 (0.0239)

− 0.0380** (0.0156)

− 0.0270** (0.0127)

− 0.0308 (0.0211)

− 0.0122 (0.0140)

Unemployment (t − 1)

− 0.0291** (0.0114)

− 0.0552** (0.0224)

− 0.0285 (0.0222)

− 0.0346 (0.0261)

− 0.0247* (0.0130)

0.00379 (0.0235)

− 0.0390** (0.0176)

Unemployment growth

− 0.0126 (0.0548)

− 0.00875 (0.0486)

− 0.00943 (0.0392)

0.00749 (0.0312)

0.00531 (0.0248)

0.0263 (0.0340)

0.0106 (0.0314)

Population over 65 (t− 1)

0.0109 (0.0300)

0.394** (0.176)

0.0118 (0.0197)

0.233 (0.194)

0.0375 (0.0300)

− 0.0147 (0.0502)

0.0150 (0.0410)

Population over 65 growth

− 0.671 (0.804)

− 0.953 (0.710)

− 0.718 (0.739)

− 0.744 (0.972)

− 0.538 (0.711)

− 2.793 (2.118)

− 0.329 (0.644)

Democracy (t− 1)

− 0.0306** (0.0119)

− 0.0400* (0.0194)

− 0.0304** (0.0133)

− 0.0531*** (0.0196)

− 0.0265** (0.0114)

0.0337* (0.0202)

− 0.0558*** (0.0158)

Democracy growth

− 0.0534* (0.0301)

− 0.0408 (0.0277)

− 0.0508* (0.0303)

− 0.0438* (0.0256)

− 0.0351* (0.0208)

− 0.0440 (0.0271)

0.00137 (0.0259)

Right-wing party (t − 1)

0.00689 (0.0100)

0.0312 (0.0274)

0.00644 (0.0108)

0.0222 (0.0208)

0.00383 (0.00978)

− 0.0359* (0.0185)

0.00852 (0.0109)

Right-wing party growth

− 0.00516 (0.0269)

0.0222 (0.0201)

− 0.00503 (0.0362)

0.0164 (0.0269)

0.00525 (0.0209)

− 0.0441 (0.0318)

0.0138 (0.0252)

Constant

0.327** (0.137)

2.219** (1.036)

0.272* (0.162)

0.248 (0.283)

0.152 (0.245)

Observations

349

349

349

325

349

163

186

R2

0.210

0.333

0.204

R2 adjusted

0.108

0.246

Variance inflation factor (VIF) (mean)

2.61

ar1p

0

0

0

0

ar2p

0.824

0.844

0.442

0.271

Sarganp

0.00451

0.334

0.133

0.153

Difference in Sargan

0.612

0.490

0.238