THE ANALYSIS OF THE EXTENT OF OPERATIONAL STATE CONTROL IN THE EUROPEAN UNION COUNTRIES

Abstract

The presented empirical analysis concerns an operational control of government over the economy in the European Union and it touches the relation between the operational economic activity of government and the dynamics of economic growth. In case of contemporary highly developed economies every government can utilise a wide range of fiscal instruments that can influence an economic process in the short term. As a result, the operational control of government over economy should be treated as a complex phenomenon. Thus, in case of international comparisons some tools of multidimensional analysis can be applied to measure it. In the presented study a synthetic measure of development was applied, as it enables to verify an extent of the operational economic activity of government in every country, to build a rating of the countries and to classify the countries into created typological groups. The results of the empirical study show that the countries with high operational government control over economy tend to have lower dynamics of economic growth than the countries with a low short term economical activity of government. The economies that were classified as the countries with low operational economic control of government in the year 2004 obtained almost twice as high dynamics of GDP growth as the countries that were classified to the groups with middle, higher and the highest extant of economic control of government. As a result, it can be stated that the presented empirical study conveys an important contribution in favour of a notion that the operational control of government over economy is currently getting less effective in supporting an economic welfare of societies.