Institutional and Non-Institutional Determinants of Volatile Non-Systematic Discretionary Spending: A Panel Data Analysis


  • Farhat Rasul Assistant Professor, Department of Economics and Statistics, HSM. University of Management and Technology, Lahore
  • Nabila Asghar Associate Professor, Department of Economics and Business Administration, Division of Management and Administrative Sciences, University of Education, Lahore
  • Hafeez Ur Rehman University of Management and Technology Lahore



Volatility, Non-systematic Discretionary Spending, GMM


Volatility in discretionary public spending has diverse implications for overall economic performance. This study investigates institutional and non-institutional factors of non-systematic discretionary public spending. The study considers a panel of 55 economies for a period of 1990-2019 and applies GMM estimation technique. The findings suggest that in aggregated sample, institutional determinants significantly reduce volatility in non-systematic discretionary public spending; nevertheless, non-institutional determinants promote such spending volatility. Additionally, disaggregated analysis suggests an inverse situation in developing economies.