This document summarizes a presentation on the negative consequences of austerity policies through public expenditure cuts. The presentation discusses how austerity aims to reduce debt and deficits through lower spending and higher taxes. However, evidence from several European countries shows that austerity had unintended consequences like harming healthcare systems, increasing health inequalities, damaging work-life balance, and reducing life expectancy. The conclusion proposes setting reasonable constitutional limits on expenditures and minimum levels for key investments and services to prevent disproportionate austerity measures from causing further social issues.

1. 2nd Canadian International Conference on
Humanities & Social Sciences 2019
(HUSO2019)
A RESEARCH ON THE NEGATIVE CONSEQUENCES OF AUSTERITY POLICIES
ON SOCIAL STRUCTURE AND
A PROPOSAL AGAINST NON-PROPORTIONAL PUBLIC EXPENDITURE CUTS
Zeynep MUFTUOGLU,
Dr, Res. Ass., Atilim University, Turkey
13-14 July 2019 - Toronto, Canada

2. A RESEARCH ON THE NEGATIVE CONSEQUENCES OF AUSTERITY POLICIES
ON SOCIAL STRUCTURE AND
A PROPOSAL AGAINST NON-PROPORTIONAL PUBLIC EXPENDITURE CUTS
I. THE CONCEPT OF PUBLIC EXPENDITURES
II. THE CONTENT OF AUSTERITY
III. NEGATIVE CONSEQUENCES OF AUSTERITY POLICIES THROUGH
PUBLIC EXPENDITURES
CONCLUSION

3. I. THE CONCEPT OF PUBLIC EXPENDITURES
A. The Definition of Public Expenditures
B. The Characteristics of Public Expenditures
C. The Functions of Public Expenditures

4. A. The Definition of Public Expenditures
• The views and applications as to the concept as well as the scope of public
expenditure have varied through time and depending on location.
• For this reason, it is not possible to provide an all-inclusive definiton.
• Though, in the broad sense, public expenditures can simply be described as:
- «the spendings by public bodies on the common needs of the society
by following specific legislative and administrative regulations»

5. B. The Characteristics of Public Expenditures
In present day, as the states take on additional duties and responsibilities, public
expenditures too become multifaceted in order to meet the costs of these
outputs
- The first is the conventional and mainstream public expenditures: the ones to
meet the public services that are indivisible, unpricable such as security,
jurisdiction and diplomacy.
- The second group: belongs to the semi-public operations undertaken by both
the state and the private sector given the size, sectors and profitability such as
health and education.

6. - Third and final group: refers to the activities of free enterprise. These are the
ones states would like to have a share in due to their competitiveness such as
business ventures like constructions and other economic initiatives.
All three groups create public expenditures when the state is involved in the
services and the public source is used. In a country relies on the approach
depending of the size of the country.

7. C. The Function of Public Expenditures
These spendings maintain the role of the state and the responsibilities laid upon
them and vice versa
In modern statas, especially the ones that adopt social state principle, public
expenditures might function as a tool for
- Purchase goods and services
- Create employment areas,
- Provide investment
- Provide incentive
- Redistribute income and wealth
- Secure vertical equality ...

8. II. THE CONTENT OF AUSTERITY
A. The Aim of Austeriy Policies
B. The Methods of Austerity Policies

9. After 2008 financial crisis, especially Europe experienced a decade-lasting
struggle and its effects are still being perceived. Among many solutions
suggested to overcome that crisis, austerity policies has always been on top of
the lists.
Austerity can be defined as:
«a difficult econonomic situation caused by a government reducing the amount
of money it spends” (Cambridge Dictionary)
«difficult economic conditions created by goverment measures to reduce a
budget deficit, especially by reducing public expenditure» (Collins Dictionary)
! Austerity can be pointed as both the solution to the crisis and the reason to
the post-crisis struggles.

10. A. The Aim of Austeriy Policies
Austerity policies aim to:
- reduce public sector debt,
- provide financial instability,
- prevent national or regional recession,
- demonstrate financial discipline,
- reduce costs
- reduce or end budget decifits

11. B. The Methods of Austerity Policies
1. Decreasing public expenditures
(as a tool to directly reduce the public spendings)
2. Increasing taxes
( as an indirect tool to reduce the purchasing power and demand)

12. III. NEGATIVE CONSEQUENCES OF AUSTERITY POLICIES THROUGH
PUBLIC EXPENDITURES
• Although the underlying targets aim beneficial outcomes; the results of such
policies may end up with unfovorable consequences
• Since mentioned policies are implemented on various types of public services
many countries of Europe, it is greatly important to observe the consequences
of the treatments and try to correct the negative effects of them.

13. Some examples of different areas from different countries can be shortly listed as:
- Dismantle the health care system (Helena Legido-Quigley; Laura Otero; Daniel la Parra, Will Austerity Cuts Dismantle
the Spanish Healthcare System?, BMJ 2013;346:f2363, https://www.bmj.com/content/346/bmj.f2363.short, date accessed: 03.05.2019 )
- Enhance health inequalities (Marina Karanikolos; Alexander Kentikelenis, Health inequalities after austerity in Greece,
International Journal for Equity in Health, 15:83, 2016, https://equityhealthj.biomedcentral.com/articles/10.1186/s12939-016-0374-0, date
accessed: 03.05.2019)
- Harms work-life balance (Suzan Lewis; Deirde Anderson; Clare Lyonett; Nicola Payne; Stephen Wood, Public Sector
Austerity Cuts in Britain and the Changing Discourse of Work–Life Balance, Work, Employment and Society, 31(4), 2017, pp. 586–604,
https://journals.sagepub.com/doi/full/10.1177/0950017016638994#articleCitationDownloadContainer, date accessed: 23.02.2019)
- Bring irresponsibility among politics (Alexander Kentikelenis; Marina Karanikolos; Aaron Reeves; Martin
McKee; David Stuckler, Greece's health crisis: from austerity to denialism, The Lancet, V. 383, I. 9918, 2014, pp. 748-753,
https://www.sciencedirect.com/science/article/pii/S0140673613622916, date accessed: 03.05.2019)

14. - Cause a dramatic fall in private domestic demand (Francesco Giavazzi; Marco Pagano, Non-
Keynesian Effects of Fiscal Policy Changes: International Evidence and the Swedish Experience, NBER Working Paper No. 5332,
https://www.nber.org/papers/w5332, date accessed: 03.05.2019)
- Fall of life expectancy and shorthening in time of life (Owen Jones, Austerity kills: this week’s
figures show its devastating toll, https://www.theguardian.com/commentisfree/2018/aug/08/austerity-kills-life-expectancy-
standstill-britain date accessed: 31.12.2018)
- Increase child death (Robert Boot; Patrick Butler, UK austerity has inflicted 'great misery' on citizens, UN says,
https://www.theguardian.com/society/2018/nov/16/uk-austerity-has-inflicted-great-misery-on-citizens-un-says, date accessed:
31.12.2018)
- Creates destitution (Peter S. Goodman, In Britain, Austerity Is Changing Everything,
https://www.nytimes.com/2018/05/28/world/europe/uk-austerity-poverty.html, date accessed: 31.12.2018)
- Cause social unrest in society (Jacopo Ponticelli; Hans-Joachim Voth, Austerity and Anarchy: Budget Cuts and
Social Unrest in Europe, 1919-2008, UBS International Center of Economics in Society; Centre for Economic Policy Research,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1899287, date accessed: 03.05.2019)

15. CONCLUSION
• Regarding the characteristics and nature of public expenditures, mentioned
austerity policies deriving from speding cuts are likely to cause many
unfavorable consequences
• It is possible to build proposal package that can be implied against non-
proportioned implementations of austerity policies in order to prevent new
negative consequences of such policies

16. - Constraining public expenditures if and only if the usage of public
expenditure power violates budget right
- Determining reasonable and applicable contitutional limits, for examle
a certain amount of GDP, as a base for public expenditure limits that will be
spent in a fiscal year in that country
- Using such limits above as a mandotary amount that will be spent in
the country to create public investment and provide public service and setting
fiscal rules at legislative level to define a minimum limit for certain invesments
and public services

17. Thank you very much for your interest in my presentation.
Best regards
Dr. Res. Ass. Zeynep MUFTUOGLU
(zeynep.muftuoglu@atilim.edu.tr)