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Public Expenditure; Fiscal and Monetary Policy

  • Alison Wright

Abstract

An adjunct of economic growth has been the growing share of the public sector in the economy. Between 1960 and 1972 public expenditure increased from 19 per cent of GNP to 25 per cent,1 although the latter figure is still low compared with public expenditure in most European countries. Between 1962 and 1972 government expenditure for social purposes, in particular on education, in relation to GNP rose. Expenditure on economic activities, i.e. transport and agriculture, remained fairly constant at about 4 per cent of GNP. Spending on defence fell in relation to GNP from 2·6 per cent to 1·8 per cent in 1972. While public expenditure on housing declined in relation to overall spending, spending on infrastructure rose rapidly and increased from 2·2 per cent of GNP in 1960 to 5·5 per cent in 1967 and 5 per cent in 1969 and 1970.2 Looking at categories of expenditure in relation to total budget expenditure, spending on defence fell from 19 per cent in 1962 to 13 per cent in 1976, while expenditure on social activities rose from 24 per cent to 40 per cent of the total and expenditure on education from 9 per cent to 19 per cent. Investment expenditure overall grew at approximately the same rate as GNP, lagging in health, education and agriculture, where there were delays in carrying out projects and towards the end of the 1960s a growing tendency to offset increases in current expenditure by cuts in investment expenditure.

Keywords

Interest Rate Monetary Policy Fiscal Policy Public Expenditure Autonomous Agency 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. 2.
    See OECD, Economic Surveys: Spain (Paris, 1974) p. 32.Google Scholar
  2. 4.
    For an account of the very great autonomy enjoyed by the agencies prior to 1958, see the IBRD report, The Economic Development of Spain (Baltimore, 1963).Google Scholar
  3. 5.
    Ramón Tamames, Estructura económica de España (Madrid, 1970) p. 700.Google Scholar
  4. 6.
    Ministerio de Hacienda, Liquidatión de los Presupueslos de los Organismos Autónomos de la Administración (Madrid, 1975).Google Scholar
  5. 7.
    See OECD, Economic Survey (1974) p. 33.Google Scholar
  6. 8.
    Central government transfers to local authorities rose from Ptas 0·2 billion to 30·3 billion in 1971. See OECD, Economic Survey (1974).Google Scholar
  7. 9.
    Borrowing by local authorities on the long-term capital market has, however, increased from an average of Ptas 1·0 billion in 1966–8 to an average of Ptas 3·0 billion in 1969–71. (Until 1967 local authorities sold land to raise money but have since become net purchasers of land.) See OECD, Economic Survey (1974) p. 33.Google Scholar
  8. 11.
    See OECD, Economic Survey (1974) p. 34.Google Scholar
  9. 13.
    3 per cent in 1962 (OECD, Economic Survey (1974) p. 35).Google Scholar
  10. 19.
    See OECD, Economic Survey (1974) p. 38.Google Scholar
  11. 29.
    See R. Martinez Cortina, Crédite y banca en España : Analisis y estructura (Madrid, 1971) p. 64.Google Scholar
  12. 34.
    See OECD, Economic Survey (1974) p. 21.Google Scholar
  13. 37.
    Growth in liquid assets was 17·7 per cent on average from 1961 to 1970 and 23·7 per cent from 1971 to 1973 (OECD, Economic Survey (1975) p. 25).Google Scholar

Copyright information

© Alison Wright 1977

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  • Alison Wright

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