Table 11.

The effect of fiscal consolidation on total expenditure for the 2009–2014 period

	Dynamic Panel Estimation SGMM
	(1)	(2)	(3)	(4)	(5)	(6)
${\mathit{Texp}}_{it-1}$	0.710*** (0.230)	0.768*** (0.377)	0.618*** (0.147)	0.616*** (0.132)	0.689*** (0.088)	0.637*** (0.129)
${\mathit{fa}}_{\mathit{it}}$	−0.546** (0.109)	−0.777*** (0.202)	−0.703** (0.174)	−0.816*** (0.175)	−0.847*** (0.199)	−0.694*** (0.193)
${\mathit{corrup}}_{\mathit{it}}$		−3.082 (2.033)	−0.696 (1.002)	−0.321 (0.283)	−0.617* (0.344)	−0.376 (0.297)
${\mathit{debt}}_{\mathit{it}}$			0.047** (0.023)	0.0381 (0.017)	−0.023 (0.045)	−0.066** (0.027)
${\mathit{gdpg}}_{\mathit{it}}$				−0.095*** (0.036)	−0.345*** (0.120)	−0.071** (0.033)
${\mathit{eldy}}_{\mathit{it}}$					0.388*** (0.139)	−0.494*** (0.189)
${\mathit{young}}_{\mathit{it}}$						−0.554*** (0.195)
N	115	115	115	114	114	114
Groups	23	23	23	23	23	23
N-instr	7	7	10	13	15	13
AR(1)	0.069	0.061	0.055	0.002	0.011	0.008
AR(2)	0.124	0.220	0.270	0.290	0.436	0.320
Hansen	0.311	0.568	0.650	0.479	0.391	0.368

Robust standard errors are in parentheses. Regressions are based on the Blundell-Bond estimator. Starting from the most parsimonious specification (column 1), we progressively introduce GDP growth, corruption, public debt, eldy and young population in columns (2)–(6). Significance level at which the null hypothesis is rejected: p < 0.1*; p < 0.05**; p < 0.01***