European government expenditures: convergence or persistence of the varieties of capitalism?

Abstract The creation of the European Monetary Union led to the development of a European fiscal framework. Member States have become required to reduce their public deficits and limit the increase in public spending. However, these countries display very different institutional characteristics, particularly in terms of the form and scale of state intervention. This article seeks to determine whether the development of a European fiscal framework has led to convergence in the size and composition of public expenditures of Eurozone member States between 1996 and 2019. Dispersion indicators and a dynamic cluster analysis are used to study fiscal convergence. The results show an absence of overall convergence. In addition, clusters of countries with different institutional specificities persist. A slight convergence is also observed for Mediterranean and Eastern European countries.