Another quick post today. It is about a topic that I have touched upon in the past but back then my focus was on distingusihing between Greece and the Euro Area (EA). Now I want to widen the focus and move on a periphery - Euro Area comparison.
By now you must be wondering what the hell I'm talking about. I want to cast a quick glance on the structure and ulteriorly the structural focus of the public sector in Euro Area countries. As you will see (most) peripheral countries seem to have a slightly different focus when allocating their public sector budgets htan do core EA countries.
Here is two charts about genral government total expenditure in selected core and peripheral EA countrties.
As you can see from the charts, general government total expenditure for the selected core and peripheral EA countries are more or less the same. I want to draw the line to Spain who is way lower than the EA17 average.
You are probably thinking now, what were you talking about in your introduction. Well, here are the two charts concerning compensation of employees of the general government.
And here's the weird thing. While total expenditures were more or less the same or even slightly higher for the core, compensation of employees in most of the peripheral countries was higher as a % of GDP than the EA17 average while that for core countries was lower than the EA17 average.
What that means in my humble opinion is that, in core EA countries, more funds are available to be allocated for the actual provision of public services than in the peripheral countries. Of course I could be terribly wrong here, so if you think so please say so in the comments section. I don't know if public services are of higher quality in core EA countries but certainly more funds are spent for their provision.
I want to be fair here and set Spain appart from the rest of the periphery, the Spaniards seem to run a tight ship.
What about the different structural focus that I was talking about in the post's introduction ? Well you can decide what that is for yourselves, maybe I was confused when writing the intro...