Budgetary Responses Research Articles

INVITED PAPER — INTER-GENERATIONAL IMPACTS OF SINGAPORE’S BUDGETARY RESPONSES TO COVID-19: GENERATIONAL ACCOUNTING FRAMEWORK

Singapore’s rapidly aging population poses significant challenges to the government’s long-term fiscal sustainability as it structurally affects government revenue and expenditure. Amidst the demographic trends, total government spending has skyrocketed to unprecedented amounts in 2020 in response to the COVID-19 pandemic. This paper evaluates Singapore’s fiscal sustainability and intergenerational fiscal impacts through the lens of generational accounting and actuarial analyses, before and after COVID-19. Our model predicts a pre-COVID absolute intergenerational gap of S$512 thousand between future generations and current newborns, implying that there is considerable intergenerational inequity. This gap increases by a further S$67 thousand after factoring in COVID-19’s impact on government net spending and short-term fertility rates. Fiscal balance can be restored in the short term and intergenerational equity in the long term, after incorporating key policy changes such as Goods and Services Tax (GST) hike and carbon tax increases.

Budgetary responses by the USA to support Ukraine during and after the war

IMPACT The Russian invasion of Ukraine is a major threat to the stability of Europe and the free world. The authors explain why the state of the Ukrainian military at the point of invasion in 2022 necessitated substantial international military and economic assistance. The USA has been the largest contributor, providing almost US$175 billion in defence of Ukraine between March 2022 and April 2024. While the USA provided almost two-thirds of this assistance early in the conflict, political disagreements in the USA stalled additional aid for almost two years. After a six-month hiatus, the Congress approved additional funding for Ukraine on 20 April 2024 at the total amount tof $65 billion (H.R. 8035, 2024). The aid that has been provided combines military, economic and humanitarian assistance. Potential future political disagreements in the USA make prospects for further aid uncertain due to opposing views on Ukraine aid by the two US presidential candidates before the November 2024 election. For practitioners, this study reviews the federal budget process in the times of extreme geopolitical uncertainty, analyses the role of US–Ukraine military and humanitarian assistance aimed at holding Ukraine’s front and securing European capacity for self-defence.

Government budgetary responses to the COVID-19 crisis: insights and future directions for crisis budgeting research

PurposeThis paper presents a review of literature, aimed at analyzing and understanding the nexus of knowledge on the topic of government budgetary responses to COVID-19 and identifying gaps for future research directions on crisis budgeting.Design/methodology/approachA systematic literature review approach was conducted by considering scientific journal articles written in English and published through 2020–2022. The databases used for the literature search in this paper were Scopus and Web of Science, resulting in 41 articles for final review.FindingsThis review found that in a crisis, budgetary responses were greatly determined by perceived uncertainties. In the case of the COVID-19 crisis, governments seemed to prioritize economic recovery. While many studies have documented budgetary responses to the crisis, most were written in the beginning of the crisis through documentary content analysis, leaving significant research gaps. Thus, this review offers directions for future research concerning governmental response to perceived uncertainty, logic behind governments' budgeting strategies, sustainable development principles within crisis budgeting and the prioritization of economic considerations in a health crisis.Originality/valueThis paper is one of the first to present insights into the state of research regarding the topic of government budgeting during the COVID-19 crisis. In addition, it provides insights from the literature for anticipating future shocks and crises, along with directions for future researchers in developing their research agenda.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-01-2023-0057

Fiscal Balance Factors of the Local Government: Panel Data Evidence from OECD Countries

Fiscal balance is perceived as a principal measure of fiscal sustainability in the local government. It also affects the budgetary response to a potential recession, determining a fiscal distress and a financial resilience. Thus, the economists conduct studies to identify factors influencing the fiscal balance at the local public level. Therefore, the aim of the paper is to examine fiscal, socio-economic, political, and institutional factors which affect the level of fiscal balance of the local government sector in Gross Domestic Product (GDP) on the basis of the OECD countries in the period 2007–2021. In the study both panel data models with fixed effects (FE) and random effects (RE), dynamic panel data models (GMM), as well as panel quantile regressions with fixed effects were estimated. As a result, the paper confirms that fiscal balance of the local government in GDP is affected by fiscal decentralisation on the expenditure side, an investment activity, a change in the debt ratio, an inflation, a change in the unemployment rate, the Human Development Index, the trade openness, the GDP growth, and local elections. What was also found was a statistically significant influence of the corruption in the case of the panel quantile regression with fixed effects. In addition, the Mann-Whitney U test, the Kruskal-Wallis test, and the Dunn test were applied to identify whether the level of fiscal balance of the local government sector in GDP had the same distribution in Central and Eastern European (CEE) countries and other OECD countries.

Healthcare and Education Professions’ Perception of Government Health Crisis Management in Thailand

Government plays a significant role in providing public services to its citizens. When crises such as the COVID-19 pandemic threaten the public, the leading role of government becomes crucial. This study examines the perceptions of healthcare and education professionals of the level of success of the Thai government’s actions and policy implementations when responding to the early stages of the COVID-19 pandemic. The results of the mixed-method research approach showed that health professionals thought the government’s actions pertaining to ‘risk communication (to the public)’ was ‘good.’ However, both professions thought the government’s reaction to the pandemic was ‘fair’ in the following domains: risk assessment, regulatory actions, border control and travel bans, proactive risk management, and economic and budgetary responses. Overall, according to the findings, the government’s response to the pandemic left significant room for improvement.

Re-budgeting local government budgets to handle the COVID-19 pandemic: Indonesia’s experience

ABSTRACT This study examines the budgetary response to the COVID-19 pandemic by Indonesia’s local governments. It specifically looks at the role of key local government players in executing the Covid-related budgeting instructions from central government, a perspective that has not been adequately addressed by previous studies. A qualitative case study approach was employed, drawing on practice theory. The qualitative data were collected through interviews via video conferences, WhatsApp chats, and documentary analysis. Using practice theory as the framework, this paper provides an in-depth analysis of how budgeting practitioners responded to the pandemic budget policy, conditioned by the rules, practical understanding, and teleoaffective structure that oriented them, and shedding new light on budgetary responses to COVID-19. The findings show that the budget instructions from central government to deal with the COVID-19 pandemic (what was intended) did not match the responses of the key budgeting actors at the local government level (what actually happened). Instead, the budgeting actors tended to prioritise doing their normal everyday bureaucratic activities, rather than implementing central government’s instructions to combat the pandemic.

DE L’INFLATION EN 2022 : HYPOTHÈSES GÉOSTRATÉGIQUES À L’HEURE DE L’INVASION DE L’UKRAINE

Are the root causes of the current inflationary tensions geostrategic in nature? A global perspective of the major geostrategic issues pitting the United States and its Western allies against China and Russia, for the most part, is not only necessary but unavoidable. Is a clash of blocks now at work with the Russian invasion of Ukraine? These tensions are not only of a military nature but, above all, an economic, commercial and financial one. Monetary and budgetary responses, particularly those implemented in the United States, must be placed in this geostrategic context, as they form, by their magnitude, developments that have not been seen since the Second World War. In this respect, the guidelines announced in August 2020 by Jerome Powell, President of the US Federal Reserve Bank, constitute a revolution in monetary policies, the importance of which was not immediately perceived: after 40 years’ fighting against inflation since Paul Volker in 1979, the FED deliberately wished for a return to inflation and acted accordingly. One hypothesis adopted here is that the debt generated in part by the repeated trade deficits suffered by the United States in its “systemic” relations with China, especially since 2001 and its acceptance into the World Trade Organization, can only be reduced – in the minds of American leaders – by a fiscal-monetary “policy mix” which must lead to strong growth and moderate inflation just as in the years following the Second World War. The other two debt reduction options are austerity policies and default: the former have never had priority in the United States, while the latter is not possible because the US dollar must remain the world’s currency. The paper’s contents resituate the rise of inflationary pressures on goods and services observed in 2021 and 2022 within the framework of the systemic relations (economic, commercial, financial, etc.) that have developed between the United States and China since the early 1980s. With Russia’s invasion of Ukraine in February 2022, and against the background of a “new type” of relationship between Russia and China, should the economic and financial globalization phenomena of the past 40 years be called into question?

Turkey's Budgetary Responses to the Pandemic and Comparison of the Stringency Level of Interventions in Turkey and Countries in East, South, and Southeast Asia

This study analyses strategies for responding to COVID-19 via considerations of the Turkish state budget, the effects of the pandemic, and projections of macroeconomic and fiscal indicators. Additionally, the stringency level of Turkey's interventions in the pandemic is examined by comparing the responses of countries in East, South, and Southeast Asia. The aims of the study are to analyse Turkey’s fiscal responses to COVID-19 and to assess future estimates of economic and fiscal indicators. Another objective is to compare the level of rigour of the Turkish government's interventions with that of selected Asian countries using various indices calculated by the Oxford COVID-19 Government Response Tracker (OxCGRT). Data belonging to macroeconomic and fiscal indicators of Turkey were examined from 2019 to 2023 using proportional analysis, and countries’ response indices were calculated by averaging daily data from OxCGRT between 11 March 2020 and 28 February 2021. The study includes comparative results based on the relationship between fiscal responses and the rigour level of interventions. The originality is to be the first study that comprehensively examines Turkey’s responses to the COVID-19 and its effects on the state budgeting in the short and medium-terms. It is reported that the Turkish government has taken decisive actions in the face of the pandemic when compared to Asian countries but response costs have driven significant increases in the planned levels of budget and borrowing.

New Zealand Government’s budgetary response to the COVID-19 pandemic

Purpose This paper aims to provide a commentary on how well the New Zealand (NZ) Government has used the budget as a tool to tackle the social and economic problems associated with the COVID-19 pandemic. The role of public budgeting as a political instrument is also critiqued. Design/methodology/approach An analysis was carried out of relevant documents that included government policy statements, budgets, news articles and website information on the pandemic. Meaningful interpretation of information and reflections helped provide the basis of the commentary. Findings Public budgeting has a prominent role in addressing a major global crisis. Budgets need to quickly respond to the needs of the moment in saving lives and sustaining people’s well-being, businesses and the economy. In a crisis situation, the social, political and economic factors become crucial determinants of budgetary policy measures. Although strong political leadership is required to deliver budgets under unimaginable circumstances, the ideology of the political party in government can be a powerful predictor of fiscal policies. Crisis budgeting will result in mounting budget deficits and public debts that will take many years for future generations to pay back. Practical implications This paper provides a significant learning for other nations. These lessons will guide budget policymakers to prepare better for potential crisis in the future. Originality/value This paper is original and based on the NZ Government’s budgetary response to the COVID-19 pandemic. It will be valuable in formulating budget policies and public funding decisions in a major crisis.

The effects of health spending on the propagation of infectious diseases.

We explore the discontinuity in the allocation of the main federal grant to Brazilian municipalities to identify the local effects of health spending and the spillovers into the bordering jurisdictions. Fiscal reactions are asymmetric: small neighbors reduce health spending, while we do not find a significant budgetary response in the largest neighbor. Our results suggest a reduction in the spread of infectious diseases in the neighbors, with fewer residents hospitalized with gastrointestinal infections. In addition, the elderly demand less hospitalization in the largest bordering jurisdictions due to respiratory infectious diseases. Finally, we find a direct and significant reduction in infant mortality, consistent with the observed pediatricians' increase, while the spillover effects on neighbors' mortality rates are not conclusive.

Design, reporting, and broader impact: COVID-19 budgeting in Singapore

As governments undertake extraordinary policy measures in response to the COVID-19 pandemic, prevailing institutional factors can potentially compromise implementation success and subsequent outcomes. This paper illustrates this issue by examining Singapore’s budgetary response to COVID-19. The analysis reveals the fiscal response of the Singapore government to be a near-exemplification of crisis budgeting which, at the same time, entails a considerable drawdown from the country’s national reserves to finance the forecasted budget deficit. However, a revision of the budget balances vis-à-vis international reporting standards finds that: (i) the budget deficit is substantially smaller; and (ii) the influence of the fiscal injections on the economy – the multiplier effect – is likely smaller than what official estimates imply. The primary emphasis here is that policymakers need to be conscious of the contemporaneous influence of prevailing institutional factors on policy effectiveness. This takes on greater significance for effective crisis-management and recovery amidst the continued uncertainty about COVID-19 and developments in international trade and resource flows in the medium-term.

Budgetary responses to a global pandemic: international experiences and lessons for a sustainable future

Besides the public health concerns and the tragic loss of life, this global pandemic has also generated severe political, social and financial challenges in many countries Besides in-depth case studies, the SI also contains cross-country comparative analyses and conceptual discussion about the revised role of public budgeting Because of these measures, many countries, including those that had strong fiscal discipline and sound budgetary balances before the COVID-19 crisis, anticipate a significant jump in the level of indebtedness [ ]the COVID-19 pandemic also draws our attention to other governance issues, such as the need to have a transparency and accountable budgetary process to deal with supplemental appropriations and re-budgeting (Anessi-Pessina et al , 2020;Kuo et al , 2020;Seiwald and Polzer, 2020), an open dialogue with citizens in budgeting (Cho et al , 2020;Vakulenko et al , 2020), good accounting and auditing practices to prevent frauds and abuse (Ahrens and Ferry, 2020;Ball, 2020;Demirag et al , 2020;Heald and Hodges, 2020) and effective collaborative governance to leverage the resources and capacity of non-governmental actors to address emergency needs (Johanson et al , 2020)

Burning the buffer: New Zealand's budgetary response to COVID-19

PurposeThe New Zealand Government has progressively strengthened its balance sheet position since the mid-1990s, other than for the four years immediately following the global financial crisis and the Canterbury earthquakes. This paper describes the nature and the forecast and actual fiscal impacts of the COVID-19 response, and identifies the transparency mechanisms which reveal these impacts. It also expresses a viewpoint on the implications of the COVID-19 response for the future resilience of the Government's fiscal position.Design/methodology/approachThe paper draws on the suite of official budgetary documents to demonstrate both the transparency of the disclosures on the COVID-19 impact and the substance of the forecast and actual fiscal impacts.FindingsThe paper reveals the change in the long-term fiscal aspirations of the New Zealand Government from one of achieving and maintaining a significant net worth buffer, to one which accommodates in the long-term a markedly smaller buffer and lower level of net worth.Originality/valueThe public financial management system in New Zealand is notable for its transparency. The Government's response to the pandemic is used to illustrate the nature and extent of that transparency.

Emerging fiscal health and governance concerns resulting from COVID-19 challenges

PurposeThis study analyzes the scope and magnitude of the budgetary responses of 17 developed countries to the COVID-19 pandemic and examines whether policy responses in March–June, 2020 are correlated with economic and fiscal conditions in these countries. It also suggests a few foreseeable economic, budgetary and social challenges and a future research agenda for assessing the pandemic's impact on finance and governance.Design/methodology/approachThis study uses documents from different sources, including the IMF and the OECD, to analyze systematically the COVID-19 budgetary responses of different countries. It also uses data from the IMF and the European CDC to analyze the relationship between budgetary responses and the seriousness of the pandemic in different countries.FindingsThis study shows that budgetary and fiscal responses to the COVID-19 pandemic varied in magnitude but had many similarities in policy types across countries. The magnitude of the response is not significantly correlated with fiscal conditions but is positively correlated with the pandemic caseload and negatively with medium-term expenditure planning, healthcare spending and anticipated unemployment changes. The study concludes by discussing the medium- and long-term concerns of these policies, such as the growing debt concerns, the seeming irrelevancy of fiscal discipline in influencing the pandemic response, the setbacks on anti-poverty and equity enhancing initiatives in developing countries and the hidden social costs as a result of postponing the necessary responses to industrial restructuring and the global climate change problems.Research limitations/implicationsThis study offers an initial comparative analysis of COVID-19 budgetary responses among developed nations. It also provides a critical and long-term perspective of these policies. The study suggests what future research may do to analyze the factors that influence the magnitude of COVID-19 responses and the long-term social and political implications of these policies.Practical implicationsIt discusses the long-term concerns of COVID-19 budgetary responses and suggests policymakers to have more open and transparent debates about difficult choices. It provides examples of creative solutions in pandemic responses to transition to a future economy and society that can be more sustainable, resilient and equitable. It also urges policymakers to pay more attention to democratic governance challenges.Social implicationsThe study highlights a few social concerns about the budgetary responses so far, such as deteriorating pension funding gaps, setbacks on anti-poverty initiatives in developing countries and hidden social costs by postponing the necessary responses to industrial restructuring and global climate change problems. It also discusses how COVID-19 reveals a lot of inequity problems in society that need long-term budgetary investment.Originality/valueThis study offers a systematic comparative analysis of COVID-19 budgetary responses among developed nations. It also provides a critical and long-term perspective of these policies and challenges policymakers and budgeters to think more creatively to address foreseeable economic, budgetary and social challenges.

“Whatever it takes”: first budgetary responses to the COVID-19 pandemic in France

PurposeThis paper highlights the emergency budgetary measures taken by the French government in response to the COVID-19 pandemic health crisis and identifies some of the key political, economic, social and environmental factors and consequences associated with those measures.Design/methodology/approachThe authors conduct a thorough analysis of official reports, bills and academic and news articles related to the pandemic management in France. The authors’ analysis covers the period from January 24 to July 31, 2020.FindingsDespite previous austerity policies, France faced the health crisis with a very high level of debt, which has complicated the management of the COVID-19 crisis. Although significant, the response brought by the French government seems in the end to be rather choppy.Originality/valueThis paper highlights three elements of analysis that allow a better understanding of the budgetary management process in France. The authors first discuss the notion of budgetary flexibility. Then, they show that the growth of participatory budgets in local communities gives hope for a possible and much needed decentralization process implying a stronger commitment of citizens. Finally, they highlight a budgetary paradox; that is, massive funding of polluting industries versus ecological issues. These three elements of analysis all advocate the need for a deeper engagement among different levels of government and actors.

Ideological and financial spaces of budgetary responses to COVID-19 lockdown strategies: comparative analysis of Russia and Ukraine

PurposeTo compare Russian and Ukrainian central governments' reaction to the pandemic, reflected in extraordinary budgetary allocations and to provide our understanding of how those allocations can be attributed to the two countries’ different social, economic and political contexts.Design/methodology/approachThe paper is built on secondary data analysis over a six-month period, i.e. January–June 2020, during which the real-time events were documented in a research diary. The data sources included budgetary and other relevant legislature, official reports from international agencies, news, press conferences and videos of interviews with key stakeholders.FindingsThe findings showed that uncertainty caused by COVID-19 and the corresponding lockdown policies in Russia and Ukraine have produced two divergent patterns of budgetary allocations: step-by-step budgetary allocations in Russia vs one emergency budget decision in Ukraine.Originality/valueThe paper explains the divergence of the central governments' budgetary decisions based on the same lockdown policy, in light of the different ideological and financial legitimized action spaces that frame governmental decisions.

Taiwan's budgetary responses to COVID-19: the use of special budgets

PurposeThe authors examine the Taiwanese government's budgetary responses to COVID-19, with a focus on the special budgets created for containing the virus, undertaking bailouts and providing economic stimulus. The authors assess the short-term and long-term fiscal implications of the budgetary measures and discuss how Taiwan's experiences could provide lessons for other countries for future emergencies.Design/methodology/approachThe authors collect data from Taiwan's official documents and news reports and compare the special budgets proposed by the Taiwanese government during the Great Recession and the COVID-19 pandemic. The authors discuss lessons learned from the 2008–09 special budget and possible concerns of the 2020 special budgets. In the conclusions, the authors discuss potential long-term implications for Taiwan's budgetary system as well as possible lessons for other countries based on Taiwan's experiencesFindingsThe authors found that the 2008–09 special budgets focused only on economic stimulus, whereas the 2020 special budgets covered COVID-19 treatments, bailouts and economic stimulus. In 2020, the Taiwanese government devised targeted bailout plans for industries and individuals most affected by the pandemic and created the Triple Stimulus Vouchers to boost the economy. Since the special budgets were largely funded through borrowing, the authors pointed out concerns for fiscal sustainability and intergenerational equity.Originality/valueCOVID-19 has changed how the world functions massively. This work adds to the literature on COVID-19 by providing Taiwan's budgetary responses to the pandemic. This work also identifies ways for Taiwan to improve the existing budgetary system and discusses lessons for other countries.

Analyzing the Chinese budgetary responses to COVID-19: balancing prevention and control with socioeconomic recovery

PurposeThe purpose of this study is to analyze the scope and magnitude of Chinese budgetary responses to the coronavirus disease 2019 (COVID-19) pandemic.Design/methodology/approachThis study analyzes budgetary response in China by means of public reports, news reports and policy documents.FindingsThe Chinese responses were comprehensive, flexible and fast. Through the normal authorization process, simplifying procedures of budget allocation and special legislative approval after the surge of COVID-19 cases, China used many budgetary measures to help suffering businesses and households to buffer the economic difficulties caused by the pandemic. It also increased public health spending very quickly so subnational governments could control and prevent the pandemic with the necessary resources. International relief efforts have also been increased. These findings show the unique strength of the Chinese political system, which is very flexible and quick in resource mobilization.Originality/valueThis study offers a quick review of the Chinese budgetary responses to the COVID-19 pandemic. It also highlights some of the future concerns and needs of the Chinese government in domestic and global health areas.

Egyptian budgetary responses to COVID-19 and their social and economic consequences

PurposeThis paper discusses the impact of COVID-19 pandemic on the Egyptian economy and Egyptian government's budgetary responses to the pandemic.Design/methodology/approachThe authors undertake a critical analysis of Egyptian government's economic and social interventions in response to the COVID-19 pandemic, the funding of these interventions and their short- and long-term implications.FindingsThe analysis shows that the Egyptian government's response to the pandemic will shrink Egypt's fiscal space significantly as increased borrowing and debt service obligations are not offset by the levying of corona tax on salaries and wages. However, increased taxation will impact negatively on poverty. The authors show that social interventions such as cash transfers are not provided at a level which will make an impact on alleviating poverty. The authors highlight increased spending on health as well as the adoption of a gender perspective in the response to the pandemic as positive outcomes with potential for future societal impact.Originality/valueThe authors highlight the Egyptian government's budgetary response to the COVID-19 pandemic and the economic and social implications of this response.

Constructing certainty through public budgeting: budgetary responses to the COVID-19 pandemic in Finland, Norway and Sweden

PurposeThis paper provides a reflective comparison of the budgetary implications of the COVID-19 pandemic for three Nordic countries: Finland, Norway and Sweden.Design/methodology/approachBy drawing from the notion of ambiguity and constructions of certainty, this study analyzes the most relevant budgetary allocations and packages implemented by the governments of Finland, Norway and Sweden in response to the COVID-19 crisis using empirical documentary data.FindingsInfluenced by the need to save citizens' lives and protect the economy, the three countries have interpreted the COVID-19 threat in different ways. While Finland and Norway seem to be fighting a war against the virus, Sweden appears to view COVID-19 as an exceptionally difficult flu. These different perspectives are reflected in the strategies and budgetary responses implemented in the three countries.Originality/valueBy elaborating on the ambiguities of reality, causality and intentionality, this paper shows how the budgeting mindset aimed at creating certainties among citizens varies among the Nordic countries, which are generally assumed to be similar.