The Relationship between Revenue and Expenditure in the ASEAN Countries
East Asia, 31, 3, 203-221, ISSN: 1096-6838
19 Pages Posted: 9 Sep 2014 Last revised: 16 Oct 2015
Date Written: 2014
Abstract
The aim of this study is to assess the relationship between revenue and expenditure in the ASEAN countries. Using annual data for the period between 1980 and 2012 in ten member states, a long-run relationship between government expenditure and revenue emerges, both in ASEAN-6 and ASEAN-10 countries. Granger causality analysis shows mixed results, even though for five ASEAN countries the predominance of "tax-and-spend" hypothesis exists, given that government revenue drives the expenditure. Moreover, mixture models seem to produce homogeneous groups, considering the socio-economic structure, welfare state, and historical aspects. Finally, convergence measures show interesting results, confirming the sample’s heterogeneity.
Keywords: ASEAN, South-East Asia, Economic growth, Government expenditure, Government revenue, Panel
JEL Classification: B22, C33, E62, F33
Suggested Citation: Suggested Citation