Types of public investment and the regions: a spatial economic analysis of government spending on Greek prefectures over the period 1976-2005

Abstract

This paper utilizes a large database on public investment at the prefecture (NUTS-3) level in Greece for the period 1976-2005 to examine a series of questions that have to do with the allocation of public investment in the country. We focus on five aggregate expenditure categories (productive, social, transport, urban and local expenditures). We start by examining the spatial distribution of these types of public investments for the 30-year period of our sample, seeking to describe the main patterns of spatial concentration and identify significant temporal structural breaks. We then examine the extent to which expenditures in different types of public investment appear to be complementary across space and over time. We also examine the redistributive character of each of these types of expenditures and try to relate the regional allocation of investments to specific economic, locational and political characteristics of the Greek regions. Finally, we perform a large set of complementary exploratory spatial data analyses to examine the extent of geographical clustering of public investment and identify possible spillovers across the Greek regions. Although much of this analysis is predominantly descriptive, the results of our analysis are directly used to inform a number of geographical, political and economic research questions that future research on the topic should focus on