Économie et Statistique n° 343 Unemployment Benefits and Returning to Work - Housing in the European Union - Children's Pocket Money - A New Breakdown of Public Expenditure
A New Breakdown of Public Expenditure
The advent of the euro has made the co-ordination of fiscal policies a major European issue. Growth in public expenditure is a particularly important focal point that calls for a clear and comprehensive approach. The system of national accounts provides the best benchmark for this, especially as regards European monitoring of growth in public finances. When taken as a whole, public finances are economically well described in the account for all public administrations in the national accounts. However, refining this observation calls for a clarification of expenditure by public administration sub-sector to improve the analysis of the public expenditure components. The three-year government spending objectives filed every year with Brussels in the multiannual public finance programme are broken down by these sub-sectors. Yet these measures remain incomplete, since growing financial overlapping is making the answer to fundamental questions increasingly difficult. Who is at the origin of the expenditure? What are the best public expenditure steering indicators? New expenditure indicators for each public administration sub-sector can be quite simply added up to find the overall public administration expenditure indicator. They are also more instructive and economically accurate. Their definition has hence raised questions about the real decision-making centres and «first-resort financiers» for all transfer expenditure internal to the public administrations. In addition, any analysis should be made in terms of constant responsibilities since legislators may change the breakdown of tasks assigned to each administration from one year to the next. Such a statistical reconstruction is a long-winded operation since it calls for an analysis of the nature of all the transfers internal to the public administrations. Consequently, the indicators are presented for just two years: 1999 and 2000.