The Classification of Public Expenditure in Post-Soviet Union States and OECD Member Countries

Abstract

Fiscal policy has been an essential tool for world economies, developing countries in particular, in enhancing economic development. This paper investigates the management of public expenditures in the selected countries, including OECD members and Post-Soviet states. In essence, these countries have encountered similar economic milestones. The primary goal of this research is to characterise the fiscal policies of these countries and draw parallels, including the application of correlation analysis between the expenditure on economic affairs and GDP. Ultimately, the analysis of available data reveals that the distribution and percentage of public expenditure within GDP have been diversified in the various economic sectors due to different dominant economic activities. Based on the main results of the cluster analysis, two groups are distinguished: 6 countries in the first group and 9 in the second group. The expenditure on social affairs has been a priority for both groups. However, the second group of countries have spent more money on social purposes. The correlation analysis shows that there is a positive linear relationship between expenditure on the economic affairs and GDP in the past decade in all of the countries selected.