Working Paper 3: Public spending
(13 December 2010)
Public spending is one of the main policy tools used to promote development and tackle disparities across regions. This paper takes a look at patterns and trends of public investment in the new Member States of the European Union. It also examines the contribution of EU cohesion policy across various investment fields, and the effects of the economic crisis, on public expenditure.
Key findings show that despite restrictions and their relative lower levels of public expenditure, public investment is higher in new Member States than in the rest of the EU in terms of GDP. This can be linked to a significant extent to the support from cohesion policy. Given the pressure on public budgets as a direct impact of the crisis, the role of cohesion policy has become even more significant in relative terms in ensuring sufficient supply of public goods and services - critical for strengthening growth and employment.