Table 17.

The effect of fiscal consolidation on social expenditure for middle-income countries

	Dynamic Panel Estimation SGMM
	(1)	(2)	(3)	(4)	(5)	(6)
${\mathit{Sexp}}_{it-1}$	0.757*** (0.231)	0.648*** (0.195)	0.656*** (0.183)	0.799*** (0.195)	0.791*** (0.137)	0.789*** (0.135)
${\mathit{fa}}_{\mathit{it}}$	−0.104** (0.040)	−0.129*** (0.027)	−0.140** (0.028)	−0.211*** (0.060)	−0.176*** (0.054)	−0.176*** (0.054)
${\mathit{corrup}}_{\mathit{it}}$		−1.053*** (0.359)	−1.043*** (0.325)	−0.016 (0.322)	−0.662** (0.284)	−0.646** (0.270)
${\mathit{debt}}_{\mathit{it}}$			0.006 (0.009)	−0.016* (0.008)	−0.007 (0.007)	−0.006 (0.007)
${\mathit{gdpg}}_{\mathit{it}}$				−0.107* (0.055)	−0.037* (0.019)	−0.039* (0.022)
${\mathit{eldy}}_{\mathit{it}}$					0.032 (0.028)	0.044 (0.045)
${\mathit{young}}_{\mathit{it}}$						0.011 (0.035)
N	162	115	114	114	114	114
groups	18	18	18	18	18	18
N-instr	9	13	17	12	16	17
AR(1)	0.008	0.003	0.017	0.055	0.032	0.031
AR(2)	0.104	0.370	0.432	0.502	0.423	0.423
Hansen	0.888	0.881	0.601	0.380	0.373	0.382

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***