Public Debt and Economic Growth in Transitional Economies: Insights From a 50-country Panel Study
Year: 2025
Type: article
Abstract: The increase in public debt is a controversial issue in both developed and developing nations, but it is particularly prevalent in post-socialist economies. The challenge of rising public debt extends beyond economic concerns, encompassing political and social dimensions as well. Many former socialist countries have experienced a significant rise in public debt since their transition. This study explores the relationship between public debt growth and GDP, focusing on 50 post-socialist countries across Europe, Asia, and Africa from 2000 to 2019. Utilizing a panel model, the research incorporates macroeconomic factors such as gross investment, trade openness, human capital, and unemployment indices as control variables. The findings indicate a strong negative correlation between increasing public debt and GDP growth. The results suggest that, in post-socialist economies where there is no proper control over the use of credit funds, rising public debt hampers economic development.
Authors: Branka Topić-Pavković, Drago Kurušić
Institution: University of Banja Luka
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4414354427
FWCI:
Cites:
Cited by:
Related to: