Public-Sector Accounting Maturity, Social Protection Spending and Economic Growth: Implications for Sustainable Public Finance in the European Union

Socially and fiscally sustainable development requires social protection systems (SDG target 1.3) that are financed and managed through effective and accountable institutions (SDG target 16.6). Accrual-based public-sector accounting reform is expected to support this, but whether it shapes the growth contribution of social protection has not been tested. This article examined whether baseline accounting maturity conditioned the relationship between social protection spending and subsequent real GDP per capita growth in the EU-27 over 2014–2024. Two-way fixed-effects models related lagged ESSPROS benefits (SPE) and scope-matched government social protection benefits (GSP) to growth, using benefit-weighted end-2013 maturity scores and wild cluster bootstrap inference. The estimates provided no evidence of a positive spending–growth association and no evidence that accounting maturity strengthened it. The negative full-sample SPE interaction weakened or reversed when pandemic-affected years were excluded or welfare-regime interactions and common correlated effects were added, and it did not survive a Romano–Wolf multiplicity adjustment. The design could detect only interactions comparable to the average spending slope. For sustainable public finance, accounting reform should not be treated as a shortcut to growth-enhancing social protection; its contribution more plausibly lies in transparency about long-term liabilities.