Affect Government Spending Research Articles

The Causality between Economic Growth, Public Debt and Government Spending of Lao PDR

This paper aims to test the causality between economic growth, public debt and government spending. This study used the time series data from 1995-2021 and implied with a VAR model and Granger causality test. In addition, the unit root, cointegration, Lagrange multiplier and Jarque-Bera test statistics was used. The empirical analysis by using VAR model found that public debt and economic growth have no effect on public spending. But government spending affects public debt in the same direction with a statistical significance level of 0.1 meaning that only government spending affects public debt, while public debt does not affect government spending. While government spending and public debt affect economic growth in the same direction with a statistical significance level of 0.01. For the Granger Causality Test, there is a unidirectional relationship means that only government spending and public debt affect economic growth, economic growth does not affect government spending and public debt.

Estimating the dynamics of fiscal financing in emerging economies

<p class="MsoNormal" style="margin-top: 8pt; line-height: 14pt; text-align: justify;"><span lang="EN-US" style="font-family: 'Cambria',serif; mso-fareast-font-family: '等线 Light'; mso-fareast-theme-font: major-fareast; mso-bidi-font-family: 'Times New Roman'; color: black; mso-themecolor: text1;">I present a theoretical model and an empirical approach for jointly estimating the effectiveness of fiscal policy and the stochastic process of sovereign interest rate shocks. The theoretical model has features relevant to small open and emerging economies. Interest rate shocks affect the ability of firms to finance payroll expenses. This theoretical feature creates a propagation mechanism for interest rate shocks and affects government spending multipliers. This paper proposes a strategy for jointly estimating government spending multipliers and the interest rate shock process parameters.</span></p>

DEMOCRACY AND GOVERNMENT SPENDING : IS THERE A LINK?

Government spending is included in the fiscal policy component, namely the steps taken by the government to control economic development by determining the amount of government income and spending each year. This research aims to assess the influence of Democracy, PAD, Balancing Funds and GRDP on government spending in Indonesia in 2017-2021. The data type used is secondary data from the Central Statistics Agency and the Indonesian Ministry of Finance. The analytical method used in this research is panel data regression analysis with Eviews 12 software. The results of this research find that Democracy has no impact on the allocation of government spending. In contrast, PAD, Balancing Funds and GRDP positively and significantly affect government spending in Indonesia.
 
 Government spending is included in the fiscal policy component, namely the steps taken by the government to control economic development by determining the amount of government income and spending each year. This research aims to assess the influence of Democracy, PAD, Balancing Funds and GRDP on government spending in Indonesia in 2017-2021. The data type used is secondary data from the Central Statistics Agency and the Indonesian Ministry of Finance. The analytical method used in this research is panel data regression analysis with Eviews 12 software. The results of this research find that Democracy has no impact on the allocation of government spending. In contrast, PAD, Balancing Funds and GRDP positively and significantly affect government spending in Indonesia.

Structural Stability of the Relationship between Indirect Taxes and Government Expenditure in Nepal: Implications for Fiscal Policy

This study uses time series data of Nepal from fiscal years 1974/75 to 2017/18 to examine the dynamics of the relationship between indirect taxes and government spending. The study’s main objective is to examine the effect size of Value Added Tax (VAT), excise, and customs duties in predicting Nepal’s budget deficit. The data for the study purpose were obtained from the Government of Nepal, Ministry of Finance. The study used a retrospective methodology. The data were first checked for stationarity by employing the Augmented Dickey-Fuller Test, and then the link between the variables was determined using a multiple regression analysis based on ordinary least squares. The results showed that customs charges did not affect government spending in Nepal, while value-added and excise taxes had a statistically significant positive impact. The structural stability of the parameter was evaluated utilising the CUSUM and CUSUMSQ procedures. The results showed no evidence of misspecification or instability within the period predicted by the model. The residuals follow a normal distribution with no serial correlation, heteroscedasticity, or multicollinearity issues. The main implication of the study finding is that the government should exercise fiscal restraint and prioritise the collection of indirect taxes. Additionally, it recommends reducing customs taxes for new businesses and expanding the range of products subject to VAT.

Farmer Exchange Rate, Government Spending On Education And Government Spending On Health of the Human Development Index in North Sumatra Province

Human development is one of the factors in increasing the implementation of national development. Human development that is implemented can be calculated with the human level, health and standard of living. Then the level of the human development index can also affect government spending in the education sector and the health sector. The use of the model in this article with the multiple linear regression program is used to process, classical assumptions of test data using SPSS 22. The results of the analysis show that farmer exchange rates can significantly affect the human development index in North Sumatra Province, government spending in the education sector has a significant effect on the human development index in North Sumatra Province and government spending on health sector spending has no significant effect on human development index in North Sumatra Province. This shows that government spending in the health sector has not been properly realized so that it is not strong enough to increase the human development index in North Sumatra Province. The results of research on government spending in the education sector have a dominant effect in increasing the human development index in North Sumatra province.

ROLE OF OIL PRICE IN FISCAL CYCLICALITY IN SAUDI ARABIA

Testing cyclicality of fiscal policy is pertinent in any country to observe its type of cyclicality with the business cycle. In the oil abundant economy, oil price and trade openness may also play a role in determining the fiscal policy cyclicality. This research probes the role of economic growth, trade openness, and oil price on government consumption growth to verify the type of cyclicality in Saudi Arabia from 1971 to 2018. The cointegration test of Pesaran (2001) is utilized to test the cyclicality hypothesis with augmented critical bound statistics developed by Kripfganz and Schneider (2019). We corroborate the long and short-run relationships in the fiscal model of Saudi Arabia. Further, procyclicality is proved in the long run and countercyclicality is corroborated in the short run with a one-year lag effect. Moreover, government revenue has a positive effect on expenditure. However, oil prices and trade openness could not affect government spending. Keywords: Fiscal Cyclicality, oil price, trade openness, government consumption, economic growthJEL Classifications: E62, Q41, P33, O43 DOI: https://doi.org/10.32479/ijeep.10700

Government Type and Public Spending in Africa

How does government composition affect government spending in Africa’s democracies? Many scholars have examined the political, institutional, and ideological determinants of government spending, finding that government attributes can affect government spending levels. However, many of these studies have focused on OECD countries, largely overlooking the link between government spending and government composition in African democracies. I examine support for two existing theories about the characteristics of governments that can lead to increases in spending levels: the number of parties in government and the number of ministers. I assess empirical evidence for these theories using original data on government composition in 19 African countries from 1990 to 2015 and data on government spending from the World Bank. I find that a coalition at the time the budget is passed is associated with increased spending, but the number of cabinet ministers does not appear to systematically affect levels of government spending.

Does economic globalization affect government spending? A meta-analysis

Despite extensive econometric testing, the research literature has been unable to draw firm conclusions regarding the effect of economic globalization on government spending. This paper explores various dimensions of the wide variation in existing estimates of the globalization-spending relationship. By applying meta-analysis and meta-regression methods to a unique data set consisting of 1182 observations from 79 peer-reviewed articles, we find that the evidence rejects theoretical views predicting strong unidirectional effects of economic globalization on government spending. Once we account for publication selection bias, no evidence of a non-zero average empirical effect is found. More importantly, however, the type of government spending matters: while the results are consistent with the view that economic globalization exerts small-to-moderate downward pressure on government spending for social protection and welfare, other spending components are affected less significantly. The meta-regression analysis shows further that several factors influence the globalization-spending estimates reported in the literature, including the choice of the economic globalization indicator, details of the econometric specifications, and publication characteristics.

An Assessment of the Nexus Between Government Expenditure and Inflation in Nigeria

Abstract Research Background: The on-going debate concerning the exact relationship that exists between inflation and government expenditure especially in the long and short run prompted this research. Purpose: The study assesses the relationship between government expenditure and inflation in Nigeria. Apart from government expenditure and inflation rate, other variables such as exchange rate and money supply are included to ensure a robust model. Research Methodology: Secondary data from 1980 to 2017 were collected and analysed using the Johansen Cointegration analysis and vector error correction model. Results: The results showed that apart from the bi-directional relationship that exists between the variables, there exists a strong relationship between government expenditure and inflation rate and that a significant impact is sustained from the short run through the long run. The exchange rate and money supply also exhibit a strong association with government expenditure. Novelty: The study has underscored the importance of the inflation rate in Nigeria as it affects government spending by focusing more on inflation rather than the movement that was the focus of most of the previous studies. It has also shown the causality flow from both inflation and government expenditure, which hitherto remains contentious.

ANALISIS KAUSALITAS PERTUMBUHAN EKONOMI, PENGELUARAN PEMERINTAH DAN KUALITAS SUMBERDAYA MANUSIA DI PROVINSI SUMATERA BARAT

This study aims to analyze the causal relationship between economic growth, government expenditure and the quality of human resources in West Sumatra. This type of research is descriptive and associative research, where the data used is secondary data in the form of panel data from 2010 to 2017 with the technique of collecting documentation data and literature study obtained from related institutions and institutions. The data analysis used is the data used is descriptive analysis and inductive analysis. In inductive analysis there are several tests, namely: (1) Unit Root Test (2)Cointegration Test (3) Optimal Lag Determination (4) Granger Causality Test (5) PVAR Test. The results of this study indicate that (1) economic growth and government expenditure have a one-way relationship where economic growth affects government spending while government spending does not affect economic growth (2) economic growth and quality of resources humans have a one-way relationship where economic growth affects the quality of human resources and the quality of human resources does not affect economic growth (3) government expenditure and the quality of human resources do not have one-way or two-way relationships ( causality) where government spending does not affect the quality of human resources as well as the quality of human resources does not affect government spending during the study period

Sovereign Default Risk, Fiscal Adjustment, and Debt Renegotiation

This paper studies the effects of government capital accumulation on sovereign debt default risk and debt restructuring renegotiation outcomes when government has limited ability to extract revenues from households. We develop a quantitative dynamic stochastic general equilibrium model of sovereign default, debt renegotiation, and fiscal policies, where government chooses between the fiscal instruments of government consumption and government investment. Government capital provides an additional means of adjustment in the face of a bad productivity shock. It also affects government's incentive to re-access the international credit market when a country chooses to default. We implement fiscal policies and rules that restrict foreign debt, especially focusing on how fiscal rules affect government spending dynamics. The model delivers three key predictions. (1) A higher level of government capital implies less risky sovereign debt and higher recovery rates when the government chooses to default. (2) A high debt to output ratio is possible with a sufficient level of government capital. (3) Fiscal adjustment that reduces public investment may be self-defeating.

Impact on Public Cultural Spending: The Perspective of Institutional Change in Government Cultural Functions

This article explores the government cultural function factors that affect government spending on public culture services in the main point-institutional hinge by using historical data in China. The results yield main finding which is the institutional change of government cultural function would affect the scale, structure and efficiency of public cultural spending. At present, the insufficiency of values guide in government cultural functions leads to the low efficiency of public cultural expenditure, thus, institutional arrangement of government’s cultural function should pay more attention to the guidance of positive values to improve the efficiency of public finance resources in the cultural field.

Understanding Governmental Spending on Public Cultural Services: Exploring the Effects of Fiscal Decentralization Variables

This article explores the fiscal decentralization factors that affect government spending on public culture services in two main points—imbalance in revenue power and spending responsibility and promotion tournament by using provincial panel data from 1997 to 2015 in China. The results yield three noteworthy findings. First, fiscal decentralization in spending responsibility significantly reduced the proportion of government spending on public cultural services to government spending. The public financial self-sufficiency has a significant positive effect on the ratio of public cultural expenditure and public spending. Second, the coefficient of transfer payment is significantly negative, namely, the current transfer payment in China cannot increase the proportion of public cultural expenditure effectively. Third, the coefficient of government official promotion competition has also a significantly negative effect on public cultural spending. This research contributes to the literature in several ways, most notably by incorporating a more open-systems approach to the study of government spending on public culture services with the inclusion of several fiscal decentralization variables.

Visualising the demographic factors which shape population age structure

1. IntroductionThe population pyramid is one of the most popular visual representations of data in demography. In its standard form it comprises two histograms rolled on their sides and placed back-to-back, with the youngest ages at the bottom of the diagram and the oldest at the top. Generally, the male population is placed on the left and the female population on the right. The populations of each age-sex group are shown either as absolute numbers or as a percentage of the whole population. As an example, Figure 1 presents a population pyramid for Australia at 31 December 2014.A population pyramid can be created in common spreadsheet or statistical software without much difficulty, and is easy to understand. It presents immediately digestible information on the age-sex structure of a population that would be less obvious in tabular form. This distribution is important for understanding the demand for the wide range of goods and services which vary by age and sex, such as baby products, childcare, education, housing for first home buyers, household appliances, recreational activities, aged care, and funeral services (Siegel 2002). Population age structure also affects government spending and taxation receipts (Australian Government 2015). A population pyramid additionally offers clues about a population's fertility history, mortality and migration, position in the demographic transition, and the likely influence of its age-sex structure on future demographic change. The shape of a population pyramid can hint at the economic or demographic role of the population in question, as might be apparent for a university town, a popular seaside retirement region, or an area with a communal establishment like a boarding school or prison. It can also be used to check for potential data problems, such as age heaping. Finally, population pyramids can also be quite entertaining, especially in dynamic form, as presented on some national statistical offices' and researchers' websites. Examples can be found* for Germany,* for Australia, and* for Moldova.Several variations on the standard pyramid have been created. Many involve disaggregating the bars into different categories of population, such as by marital status (e.g., Statistics Canada 2013), household living arrangement (e.g., van Imhoff and Keilman 1991), birthplace (e.g., Statistics Sweden 2009), educational attainment (e.g., Lutz, Cuaresma, and Sanderson 2008), labour force status (Statistics New Zealand 2015), ethnicity (e.g., Coleman 2010), and migrant status (e.g., Price 1998). Some display shadows on the bars of the pyramid where there is an excess number of one sex over another (e.g., Heenan 1965); others show age-sex structure with persons by age in one histogram and age-specific sex ratios in another (Haak 1942). Commonly, two or more population pyramids are overlaid on one another, often to compare age structure over time (e.g., The Economist 2011), to show the outcome of alternative future scenarios (e.g., Statistics Canada 2015), or to display probabilistic prediction intervals (e.g., Keilman, Pham, and Hetland 2002).However, population pyramids are not without their limitations. Because they display only the size of each age-sex group in the population, it is usually not possible to distinguish the relative contributions of different demographic processes to population age structure. For example, if there is an indentation at the young adult ages, is this more the result of a fertility decline two to three decades earlier or recent net out-migration? If age-specific populations at the upper end of the pyramid decline very rapidly with increasing age, is this just the result of mortality, or have past trends in births and migration also contributed?This paper presents a type of population pyramid that illustrates how births, deaths, and net migration have shaped a population's age structure. Termed the components-of-change pyramid, it is described and illustrated in section 2 following this introduction. …

Do CIO IT Budgets Explain Bigger or Smaller Governments? Theory and Evidence from U.S. State Governments

Given the recent concern on “big governments” and rising budget deficits in the United States and European nations, there has been a fundamental economic debate on the proper boundary and role of governments in a society. Inspired by this debate, we study the relationship between information technology (IT) and government size. Drawing on a broad range of the literature from multiple disciplines such as information systems, industrial organization, and political sciences, we present several theoretical mechanisms that explain the impact of IT on government expenditures. Using a variety of data on IT spending and state government expenditures, we find that greater IT investments made by a state chief information officer (CIO) are associated with lower state government spending. It is estimated that on average, a $1 increase in state CIO budgets is associated with a reduction of as much as $3.49 in state overall expenditures. This study contributes to the literature by identifying a key technological factor that affects government spending and showing that IT investments can be a means to restrain government growth. This paper was accepted by Anandhi Bharadwaj, information systems.

Economic growth, repression, and state expenditure in non-democratic regimes

This paper examines how economic growth affects government spending in non-democracies. A robust finding is that positive growth induces a significant increase in defence spending but a decrease in non-defence spending in dictatorships, with little effect in democracies. Government spending is slightly sensitive to negative growth across regimes. Higher growth rate in a country than its neighbours induces more spending than their average. Corruption causes a reduction in defence spending but an increase in non-defence spending. Primary education stimulates non-defence spending but reduces defence expenditure, secondary education causing the opposite effect. An under-developed country spends less than a developed country.

Keeping the Schools Open While the Troops are Away: Regime Type, Interstate War, and Government Spending

How and why do regime type and interstate war affect government spending? We argue that a political leader allocates scarce resources between social and military expenditures as a function of their relative efficiency in securing her political survival. We derive four hypotheses concerning how mobilization for and demobilization from interstate war affects government spending differently in democratic and autocratic regimes. Compared to democracies, autocracies should increase military spending to a greater degree during wartime and decrease military spending to a greater extent following a war. Autocracies also should cut social spending more during an interstate war and increase social spending more during the process of demobilization from war than democracies. Our analyses of all states in the international system from 1950 to 2001 yield support for our hypotheses.

Compensation or Constraint? How Different Dimensions of Economic Globalization Affect Government Spending and Electoral Turnout

This article extends theoretical arguments regarding the impact of economic globalization on policy making to electoral turnout and considers how distinct dimensions of globalization may produce different effects. It theorizes that constraints on government policy that reduce incentives to vote are more likely to be induced by foreign ownership of capital, while compensation through increased government spending is more likely (if at all) to be the product of structural shifts in production associated with international trade. Using data from twenty-three OECD countries from 1970–2007, the study finds strong support for the ownership-constraint hypothesis in which foreign ownership reduces turnout, both directly and – in strict opposition to the compensation hypothesis – indirectly by reducing government spending (and thus the importance of politics). The results suggest that increased foreign ownership, especially the most mobile capital flows, can explain up to two-thirds of the large declines in turnout over recent decades.

Distributive Politics, Number of Parties, Ideological Polarization, and Bargaining Power

We build a theoretical model that provides a previously unexplored way of addressing the spending-negotiation process between a governing party and the parties in a legislature, one that offers new insights as to how political fragmentation, ideological polarization, and bargaining power—as well as their interaction with one another—affect government spending. We show that the effects of both political fragmentation and ideological polarization on government spending are expected to exhibit systematic differences across regimes with different institutional features as pertain to the legislative budgeting process determining the balance of power between the governing party and the legislature. We also show that the effect of political fragmentation on government spending may be intermediated by the degree of ideological polarization. Our results allow us to better understand the existing empirical evidence and suggest new unexplored hypotheses that need to be addressed empirically.

Legislatures, Leaders, and Leviathans: How Constitutional Institutions Affect the Size of Government Spending

Research has shown that government spending can affect GDP growth rates, yet there is no comprehensive study that looks at how a country’s choice of political institutions affects government spending. Using a panel of 92 democracies, this paper focuses on how the choice of regime type (presidential, parliamentary or mixed), legislative chamber structure (bicameral or unicameral), legislative chamber size, and electoral rules affect the level of government spending. The results show that the relationship between legislative chamber size and government spending is linear in unicameral countries but non-linear in bicameral countries, plurality electoral rule is always associated with less spending than any other type of electoral rule, and unicameral and bicameral countries should not be modeled together.