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Table 6 Determinants of social spending (%GDP) in 17 Latin American countries. Period 1990–2000 and 2001–2012. GMM Estimates

From: Determinants of social spending in Latin America during and after the Washington consensus: a dynamic panel error-correction model analysis

Variables 1990–2000 2001–2012
(1) (2) (3) (4) (5) (6) (7) (8)
Education Health Social Security Housing and Other Education Health Social Security Housing and Other
Education (t − 1) − 0.265*** (0.0439)     − 0.0965** (0.0484)    
Health (t− 1)   − 0.244*** (0.0414)     − 0.0957*** (0.0308)   
Social security (t − 1)    − 0.340*** (0.0589)     − 0.154*** (0.0298)  
Housing and other (t − 1)     − 0.119** (0.0508)     − 0.212*** (0.0287)
Fiscal burden (t − 1) 0.0711 (0.0685) 0.292*** (0.0842) 0.388* (0.227) − 0.516* (0.286) − 0.0685 (0.0965) − 0.110 (0.0734) − 0.00139 (0.0901) 0.283 (0.190)
Fiscal burden growth 0.114 (0.0981) 0.156 (0.103) 0.441 (0.313) − 1.377*** (0.441) 0.0118 (0.180) 0.144 (0.146) 0.278* (0.176) 0.278 (0.363)
Per capita income (GDPpc) (logged) (t − 1) 0.0460 (0.0411) 0.0621 (0.0425) 0.0337 (0.125) − 0.0863 (0.177) − 0.0297 (0.0754) 0.0288 (0.0575) 0.0238 (0.0682) 0.245* (0.145)
Per capita income growth − 0.203 (0.335) − 0.115 (0.361) 0.443 (1.101) 3.043** (1.542) − 0.227 (0.428) − 0.743** (0.350) − 0.618 (0.422) 1.736** (0.871)
Trade (%GDP) (t− 1) 0.0923*** (0.0240) 0.0750*** (0.0269) − 0.0454 (0.0717) − 0.190* (0.102) − 0.0713 (0.0514) − 0.0120 (0.0409) − 0.152*** (0.0546) 0.182* (0.100)
Trade growth − 0.214** (0.0843) 0.102 (0.0935) − 0.0569 (0.273) − 0.720* (0.393) − 0.321* (0.177) 0.106 (0.146) − 0.223 (0.175) − 0.493 (0.364)
Foreign direct investment flows (%GNI) (t− 1) 0.0442** (0.0204) 0.00370 (0.0215) 0.0298 (0.0637) − 0.0386 (0.0949) 0.0224 (0.0277) 0.0222 (0.0187) 0.0118 (0.0220) − 0.0304 (0.0462)
Foreign Direct Investment growth 0.0235* (0.0149) 0.0110 (0.0160) 0.0155 (0.0477) 0.105 (0.0692) 0.0178 (0.0232) − 0.00562 (0.0178) − 0.0193 (0.0213) 0.135*** (0.0443)
External debt (%GNI) (t− 1) − 0.0977** (0.0464) − 0.0855* (0.0491) − 0.205 (0.145) − 0.166 (0.206) 0.0696 (0.0712) 0.00660 (0.0442) 0.0270 (0.0538) − 0.00113 (0.110)
External debt growth − 0.0845 (0.0665) − 0.213*** (0.0719) − 0.0489 (0.216) 0.153 (0.301) 0.000230 (0.112) − 0.109 (0.0877) 0.0816 (0.107) 0.323 (0.219)
Interest payments on debt (t − 1) − 0.0228 (0.0272) − 0.0582* (0.0309) − 0.0895 (0.0911) 0.233* (0.127) 0.0278 (0.0360) − 0.0232 (0.0285) − 0.0111 (0.0333) 0.101 (0.0721)
Interest payments on debt growth − 0.0490* (0.0283) − 0.0743** (0.0301) 0.131 (0.0918) 0.0326 (0.129) − 0.00533 (0.0420) − 0.0153 (0.0341) − 0.0847** (0.0412) 0.0335 (0.0864)
Unemployment (t− 1) 0.00934 (0.0323) 0.0372 (0.0335) 0.147 (0.103) − 0.0313 (0.143) − 0.152** (0.0602) − 0.0355 (0.0428) − 0.0314 (0.0523) − 0.0247 (0.107)
Unemployment growth − 0.0616 (0.0456) − 0.114** (0.0505) 0.184 (0.150) − 0.0944 (0.215) − 0.101 (0.0977) 0.00849 (0.0773) 0.128 (0.0929) 0.252 (0.192)
Population over 65 (t− 1) − 0.237*** (0.0796) − 0.0572 (0.0732) 0.306 (0.219) − 0.267 (0.317) 0.0708 (0.130) 0.0394 (0.102) 0.149 (0.128) − 0.457* (0.255)
Population over 65 growth 1.864 (2.682) − 6.221** (2.889) − 7.004 (9.232) 2.479 (12.96) 0.337 (1.828) 0.0121 (1.609) − 0.740 (1.906) 2.840 (4.027)
Democracy (t− 1) 0.0488* (0.0262) 0.0312 (0.0266) 0.0460 (0.0792) − 0.0344 (0.113) − 0.103** (0.0515) − 0.00736 (0.0388) − 0.140*** (0.0458) 0.0414 (0.0970)
Democracy growth − 0.0193 (0.0363) − 0.109*** (0.0391) − 0.172 (0.118) 0.0364 (0.166) − 0.0994 (0.0759) − 0.0297 (0.0628) 0.0949 (0.0763) − 0.0914 (0.158)
Right− wing party (t− 1) − 0.0174 (0.0237) − 0.0445* (0.0273) − 0.0564 (0.0774) − 0.00594 (0.125) 0.0274 (0.0314) 0.0445* (0.0265) 0.0455 (0.0347) − 0.0599 (0.0662)
Right-wing party growth − 0.0303 (0.0425) − 0.0507 (0.0464) 0.141 (0.139) 0.261 (0.198) 0.0265 (0.0757) − 0.0340 (0.0615) 0.0104 (0.0762) − 0.103 (0.153)
Constant 0.0749 (0.361) − 0.924** (0.431) − 0.506 (1.212) 3.806** (1.675) 0.818 (0.815) 0.172 (0.611) 0.502 (0.747) − 2.774* (1.515)
Observations 163 163 163 163 186 186 186 186
Number of countries 17 17 17 17 17 17 17 17
N 163 163 163 163 186 186 186 186
ar1p 0 0 0 0 0 0 0 0
ar2p 0.501 0.194 0.798 0.870 0.330 0.166 0.411 0.733
Sarganp 0.333 0.129 0.616 0.235 0.318 0.0889 0.199 0.00869
Difference in Sargan 0.762 0.212 0.558 0.773 0.653 0.965 0.719 0.437
  1. Lagged levels of social expenditures, GDPpc, unemployment fiscal burden and external debt (dated t − 2 and earlier) in the first− differenced equations for the first-differenced GMM estimator. For the system GMM estimator, lagged first differences of the endogenous variables (dated t − 2 and earlier) are used as additional instruments in the level equations. Year dummies are included in each model (not shown). Asymptotically robust standard errors are reported in parentheses. *** p < 0.01, ** p < 0.05, * p < 0.1