Social preferences and fiscal policies: an analysis of the composition of public expenditures in the European Union

Abstract

The European Union has recently been putting the emphasis on the need to change the composition of public expenditures to what, according to the public policies endogenous models, is considered as a high quality of public finances—that is, a higher share of productive expenditures. These recommendations are the same for all the EU member states. Joined to the fiscal requirements arisen from the Maastricht Treaty and the Stability and Growth Pact, EU authorities are promoting a one-size-fits-all fiscal policy model. Our paper analyzes the differences existing in the composition of public expenditures in the European Union. If this composition is significantly different, that would mean that in the European Union there are differences in the national preferences about the role-size of public expenditures, some that would not allow the implementation of a single model of public sector and fiscal policy.