How fiscal policy affects financial development: Empirical analysis from Southeast European countries

This study investigates the impact of fiscal policy on financial development in Southeastern European (SEE) countries from 2005 to 2023, using panel data from the World Bank Database and the Global Economy Database for 10 nations. Employing robust econometric techniques, including fixed effects, random effects, and generalized method of moments, the analysis reveals that income from taxes, public debt, and government effectiveness significantly drive financial development, with positive coefficients of 0.2680, 0.0167, and 4.4940. While government spending and fiscal freedom were included in the model, they did not show statistical significance. These findings highlight the critical role of effective tax systems, prudent debt management, and strong governance in fostering financial stability in SEE countries. The study underscores the need for targeted fiscal reforms to enhance financial development, offering valuable insights for policymakers in emerging economies.

• Publication year

  2026

• Venue

  European journal of sustainable development research

• Publication date

  2026-01-01

• Fields of study

  Not labeled

• Identifiers
  DOI 10.29333/ejosdr/17395
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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