Public Capital Expenditure Research Articles

Specificities of the artistic cultural labor market in Brazilian metropolitan regions between 2002 and 2010

This paper analyzes the singularity of artistic cultural sector workers in the Brazilian metropolitan labor market, considering the job satisfaction of artists that Throsby proposes in his work preference model of artist behavior (1994). We also examine the effect of public expenditures on the income of workers in the cultural sector. Using 2002 to 2010 data from the Monthly Employment Survey (PME) and administrative records from Finance of Brazil (FINBRA), we estimate a probit model and a wage equation. In our model, we estimate wages as a function of: (1) sociodemographic characteristics of workers, (2) a variable for informal jobs, (3) the number of working hours, (4) a variable for the worker having another job, (5) per capita expenditures on culture interacted with a dummy for artistic cultural workers, (6) interactive binary variables involving place of residence and artistic cultural workers and (7) the predicted probability obtained by the probit model. This probability is estimated based on the likelihood of working in a creative activity, considering both workers from the cultural sector and other workers, controlled by: (1) sociodemographic characteristics of workers, (2) characteristics of their jobs, (3) dummies for the metropolitan regions and (4) willingness of creative workers to work additional hours interacted with the number of hours worked. Our results show that workers in the cultural sector are likely to work longer hours when compared to workers in other sectors. For our wage equation, the results suggest that women earn relatively less than men and blacks earn less than whites. Furthermore, earnings increase with age and the level of education. Formal workers obtain higher earnings when compared to informal ones. Finally, an increase in the per capita public expenditure on the cultural sector raises the income of workers in artistic cultural occupations.

Citizenship and power in an agent-based model of tax compliance with public expenditure

In this paper we present a model of tax compliance with heterogeneous agents who maximize their individual utility based on income and the conjectured level of per capita public expenditure. We formally include psychological drivers in this model. These drivers affect individual behavior, such as risk aversion, together with appreciation of public expenditure, expectations about peers’ compliance and a natural inclination to comply, all of which we summarize in a quality termed “citizenship”. The enforcement system, based on random inspections, is standard and only partially known to agents.The agent-based model is simulated under a variety of settings, representing different “societies”. We use the artificial data produced by the model to estimate the effects of taxpayers’ traits on personal tax behavior and to build a compliance societal slippery slope. At the individual level, we find a positive dependence of compliance on all variables, with the significant exception of the tax rate, which has a negative impact. As far as societies are concerned, we show how aggregate tax compliance depends on composite indices of citizenship and power, and we find that the former is more important than the latter.

Evaluating the efficiency of public procurement contracts for cultural heritage conservation works in Italy

Almost everywhere public intervention in cultural heritage (CH) conservation is widespread. Using Italy as a case study, the paper analyses public capital expenditure for CH conservation and investigates whether the high degree of specialization of contracting authorities affects the efficiency of CH conservation works. A two-stage analysis is carried out. At a first stage, a nonparametric approach (Data Envelopment Analysis—DEA) investigates the relative efficiency scored by each single work; at a second stage, the determinant factors of the scores variability are investigated. The empirical analysis shows that, ceteris paribus, the expertise affects the efficiency of CH works.

Einwohnerveredelung im Länderfinanzausgleich: Defizite und ein Alternativvorschlag

Abstract The relation between per capita public expenditures und population density is implemented in specific population weights, which are used in the German financial equalization schemes. The population weights simulate above-average financial requirements of regions leading to higher transfers. The literature controversially discusses the specific weighting of population. For this reason this paper proposes a significant improvement of the present practice to determine municipal financial requirements on German states level with a higher accuracy. The German financial equalization scheme for the German states balances the tax revenues for the German states as well as the local municipals. So the paper analyzes municipal characteristics und combines these to a specific population weighting. The previous practice of population weighting cannot reflect the situation of German states like Bavaria, where are regions with high population densities as well as rural areas. Furthermore, the population weights...

Inter‐State Variations in Economic Growth: How Much Governance Matters?

AbstractDespite somewhat similar central allocation of funds, States in India have been achieving varying growth rates of Per Capita State Domestic Product (PC SDP). To analyze the extent to which this variation is on account of variation in governance levels, the paper constructs the Composite Quality of Governance Indices using six governance dimensions: namely, Administrative Effectiveness, Transparency Awareness and Control of Corruption, Fiscal Efficacy, Law and Order Situation, E‐Readiness Level, and Social Justice Index. Thereafter, panel regressions have been carried out to examine the extent to which governance matters in explaining inter‐State growth variation. In addition to the main explanatory variable, control variables such as Per Capita Public Expenditure (PCpe), Per Capita Consumer Expenditure, and State and time dummies have been included. Drawing upon data from 14 non‐special category Indian States over the period 2003–7, econometric results confirm that the quality of governance matters. Its coefficient is estimated to have a significant favorable impact on not just the level and growth of PC SDP. Further, output elasticity of governance has been estimated to be higher than that of public spending (PCpe). An important policy implication is that the States of India, while seeking additional funds from the Center, must also focus on improving governance to make more effective use of these funds.

Large-scale Investments in Agriculture in India

Public investment in agriculture has significant poverty-reducing effects. This article attempts to analyse trends in agricultural investments in India between the 1950s and the 2000s. It argues that public investment and expenditure on agriculture in India have grown only slowly and have not decisively increased even after more than 60 years of independence. While public capital formation and expenditure do show a moderate rise in the 2000s, a revival of India's agricultural growth requires a far greater thrust to public spending. Major and medium irrigation projects require special attention, as irrigation is instrumental not just in raising yields, but also the number of days of employment for labourers. Increasing public investment in agricultural research and extension is central to bridging the yield gap that persists. Formal credit flows to agriculture have to specifically target small and marginal farmers, and emphasis should move away from generating agricultural growth by channelling credit to agri-business firms and corporate players in agriculture. If India's second green revolution has to contribute to an accelerated reduction of poverty, hunger and malnourishment, it undoubtedly has to be a state-led project.

Japan’s Experience with Fiscal Policy in the 1990s in the Aftermath of the Bubble Economy

Nakao examines the evolution of Japanese fiscal policy in the Nineties and its current challenges. His account begins with an analysis of the collapse of the financial bubble at the beginning of the Nineties. He argues that the prolonged economic slump of the last decade largely depends on the effects of wealth losses on consumption and investment decisions and on balance sheet problems of financial and non-financial corporations. These problems were exacerbated by several structural factors, ranging from population ageing to the inflexibility of labour market and corporate governance. Nakao notes that Japanese authorities took an active approach. Many large fiscal packages were introduced to boost the economy determining a sizeable increase in public capital expenditure. Interest rates were reduced. Wide-ranging structural reforms were promoted. However, fiscal expansion did not succeed in reviving the economy. The multiplier effect of public works decreased. Public debt accumulation may have determined expectations of future tax increases; the productivity of the additional public works may have been rather limited. Nakao considers that policies that merely support demand cannot improve economic expectations. He advocates radical structural reforms and a rationalisation of public expenditure, including a better selection of capital projects. An increase of revenues, now relatively low as a ratio to GDP, may also be helpful in improving the budget balance. The author concludes that Japanese technology, saving ratio and well-educated labour force indicate that the country can successfully overcome its current problems.

Global Food Crisis: Public Capital Expenditure and Agricultural Output in Nigeria

The focus of this paper is to examine the effects of global food crisis on developing countries which most times are considered most vulnerable due to a number of factors ranging from conflicts in the region, to poverty and inequality, and factors that affect policies on agriculture. Issues concerning the use of food as alternative energy sources are still in its infant stages in Africa, and may not be relevant. The paper investigates the impact of capital expenditure on agriculture and credit to agricultural sector on the output of agriculture in Nigeria. Annual data covering 1990 – 2004 were used. Unit roots of the series were examined using Augmented Dickey – Fuller techniques. The overall results indicate that output of agriculture is positively related to capital expenditure on the sector but negatively related to the credit to agriculture. The paper therefore recommends improvements in government capital expenditure on agriculture. Credit policies and institutions should target beneficiaries (rural farmers).

US National Healthcare Expenditures, 1960-2000: Public and Private Cubic Growth Dynamics

US national healthcare expenditures (NHE) displayed cubic growth dynamics between 1960 and 2000. In any year, current NHE must equal population times consumer price index (CPI) times per capita CPI-adjusted constant dollar healthcare expenditures. Cubic growth dynamics are a consequence of the fact that essentially linear growth relationships were observed over time with total population, CPI, and per capita CPI-adjusted dollar healthcare expenditures. Similarly in any year, current private and public NHE must equal population times consumer price index (CPI) times private and public per capita CPI-adjusted constant dollar healthcare expenditures respectively. This study examined whether private and public per capita CPI-adjusted dollar healthcare expenditures displayed linear growth. Linear relationships were observed over this time period for both private per capita CPI-adjusted dollar healthcare expenditures and public per capita CPI-adjusted dollar healthcare expenditures. The finding that both of these factors were well described by linear equations suggests that that both private and public NHE growth should display cubic growth dynamics over time. From 1960 through 2000, cubic growth dynamics were observed for both private NHE and public NHE. This model suggests that shifting healthcare costs between the private and public domains will not alter the underlying cubic growth dynamics of US NHE as long as per capita CPI-adjusted constant dollar private and public healthcare expenditures increase reasonably linearly over time.

Are Foreign and Public Investment Spending Productive in the Argentine Case? A Single Break Unit Root and Cointegration Analysis, 1960-2010.

This paper addresses the important question of whether public investment spending and inward foreign direct investment (FDI) flows enhance economic growth and labor productivity in Argentina. The paper estimates a dynamic labor productivity function for the 1960-2010 period that incorporates the impact of public and private investment spending, the labor force, and export growth. Single break (Zivot-Andrews) unit root and cointegration analysis suggest that (lagged) increases in public investment spending on economic and social infrastructure have a positive and significant effect on the rate of labor productivity growth. In addition, the model is estimated for a shorter period (1970-2010) to capture the impact of inward FDI flows. The estimates suggest that (lagged) inward FDI flows have a positive and significant impact on labor productivity growth, while increases in the labor force have a negative effect. From a policy standpoint, the findings call into question the politically expedient policy in many Latin American countries, including Argentina during the 1990s and early 2000s, of disproportionately reducing public capital expenditures to meet reducetions in the fiscal deficit as a proportion of GDP. The results give further support to progrowth policies designed to promote public investment spending and attract inward FDI flows.

Economic Liberal or Arch Planner? Enoch Powell and the Political Economy of the Hospital Plan

The article critically analyses the view that Enoch Powell's promotion of the 1962 Hospital Plan was strategically incoherent. It has been argued that there was a contradiction between Powell's economic liberal position on public expenditure and his support for the Plan as a major long-term public sector capital expenditure programme. The article argues that Powell's promotion of the Plan was designed to be part of a consistent economic liberal strategy. However, the approach was problematic because of his mistaken belief that the Plan could be reconciled with modest growth in hospital running costs. This weakness is analysed with reference to the failure by Powell, and by leading officials in the Ministry of Health and the Treasury, to understand the dynamics of acute hospital costs.

P2-513 Social and geographical variations of maternal mortality in Mexico

IntroductionThis paper analyses the trend of maternal mortality rate in Mexico according to the level of social marginalisation between 1990 and 2008 and identifies socioeconomic factors that better explain the...

Income and Health Care Utilization Among the 50 in Europe and the US

This study addresses the question how income affects health care utilization by the population aged 50 and over in the United States and a number of European countries with varying health care systems. The probabilities that individuals receive several medical services (visits to general practitioner, specialist, dentist, inpatient, or outpatient services) are analyzed separately using probit models. In addition to controls for income and demographic characteristics, controls for health status (both subjective and objective measures of health) are used. We analyze how the relationship between income and health care utilization varies across countries and relate these cross country differences to characteristics of the health care system, i.e., per capita total and public expenditure on health care, gate-keeping for specialist care, and co-payments.

The Impact of Public Capital Expenditure on the Performance of Private Capital Expenditure in the Selected Economic Sectors in Malaysia

Economists have argued that public capital is one of the important business stimuli to the performance of private capital expenditure. This argument is considered as the main essence in the theory Public Capital Hypothesis (PCH) that proposed by Aschauer. PCH postulates that a positive relationship exists between private capital and public capital. However, this hypothesis remains a controversy as there has been no consensus, particularly in terms of empirical evidence. Therefore, the objective of this study is to prove the validity of the PCH by using a panel time series analysis on the four sectors of the Malaysian economy. Panel cointegration analysis is used to prove the hypothesis by using panel data for the period of 1976-2006. In this analysis, four sectors were chosen: agriculture, industry and trade, transportation and communication, and construction. Private capital expenditure for each sector is chosen as a dependent variable. Meanwhile independent variables used in the analysis are represented by public capital expenditure, gross domestic product, domestic credit ratio, and fiscal deficit. Findings of the study indicate that public capital expenditure has positive effect on private investment in all the sectors, except agriculture.

El gasto sanitario público en el País Vasco, 1995-2008: comparación con el conjunto de las comunidades autónomas

Objective To determine the growth and distribution of public expenditure on health among health sectors in the Basque Country from 1995 to 2008 and compare them with those in the 17 autonomous regions in Spain as a whole. Method Public expenditure on health in the Basque Country among health sectors and its annual growth were determined and compared with average expenditure in Spain's 17 autonomous regions through a retrospective longitudinal study. Demographic variables such as regional income (GDP per capita) and population aging were also analyzed. Results Between 2002 and 2008, the per capita public expenditure on health in the Basque Country was 10% higher than the average in the autonomous regions and growth was 1.3% higher. Per capita pharmaceutical expenditure in the Basque Country was 2% lower than the regional average, growth was 27% higher than this average, and its weight in public expenditure on health grew 0.950% annually. The annual growth of hospital expenditure in the Basque Country was 15% higher than that in primary care (3.571% vs. 3.097%) and the weight of primary care in public expenditure on health decreased 2.6 times more than that of hospital care. On average during the period, both sectors exceeded the regional average of per capita expenditure by 16-17%. However, per capita expenditure on hospital staff in the Basque Country was 20-30% higher than the regional average while that on primary care staff was 10-15% higher than this average. Conclusions Between 1995 and 2008, Basque hospital and primary care maintained their budgetary superiority over the regional average. In hospital staff, this budgetary superiority was double that in primary care compared with the regional average. Pharmaceutical expenditure was within the regional average.

Flypaper Effects Anomaly Of West Papua Capital Public Expenditure

In fiscal decentralization, local governments should be able to provide public service facilities for all communities. This study aims to determine the existence of flypaper effect in the total capital public expenditure and capital expenditure on education, health and infrastructure in districts in West Papua, 2003-2006. Tools of analysis used is panel data regression. The General Allocation Fund (DAU), the Special Allocation Fund (DAK) and the Special Autonomy Fund (DOK) partially and simultaneously have positive impact on total capital spending and capital expenditure in education, health, and infrastructure. It is also indicated the anomaly of flypaper effect in DAU, DAK, and DOK. Keywords: Flypaper effect, anomaly, fiscal decentralization, capital expenditures JEL classification numbers: H50, H75

Public Infrastructure and Private Investment in the Middle East and North Africa

The authors examine the impact of public infrastructure on private capital formation in three countries of the Middle East and North Africa-Egypt, Jordan, and Tunisia. They highlight various channels through which public infrastructure may affect private investment. Then they describe their empirical framework, which is based on a vector autoregression (VAR) model that accounts for flows and (quality-adjusted) stocks of public infrastructure, private investment, as well as changes in output, private sector credit, and the real exchange rate. The authors propose two aggregate measures of the quality of public infrastructure and use principal components to derive a composite indicator. Their analysis suggests that public infrastructure has bothflowandstockeffects on private investment in Egypt, but only astockeffect in Jordan and Tunisia. But these effects are small and short-lived, reflecting the unfavorable environment for private investment in their sample of countries. Reducing unproductive public capital expenditure and improving quality must be accompanied by policy reforms aimed at limiting investment to infrastructure capital that crowds in the private sector and corrects for fundamental market failures. This will entail privatization and greater involvement of the private sector in infrastructure investment. While infrastructure (in the form of the provision of critical telecommunications, transport, and energy services) is important, other improvements in the environment in which domestic investment is conducted are crucial. These include the need to provide financing on adequate terms and guarantee a secure and efficient justice system.

Econometric Modeling Of Romania’s Public Healthcare Expenses – County Panel Study

The purpose of our paper is to analyze the per capita public healthcare expenditure of Romania in relation to different exogenous explanatory variables, through a panel study upon the forty one regions plus the capital city. The results of the four year panel study have been interpreted and commented. Our regional public healthcare expenditure is explicated to a great extent by the regional GDP. Other strong correlation variables were not found statistically significant.

Co-payments and the demand for pharmaceuticals: Evidence from Italy

This study exploits a natural experiment in Italy to estimate how the demand for pharmaceuticals responds to variations in co-payment levels. After a period where co-payments were set to zero by a national law, the decision over co-payments was devolved to the Italian regions. While some regions re-introduced the co-payment, others did not. Using a difference-in-difference approach on regional monthly data for years 2001 and 2003, we find that an increase in the co-payment by one Euro reduces the per capita number of prescriptions by 4% and per capita public pharmaceutical expenditure by 3.4%. We also find evidence that when in 2006 some regions reduced (but not removed) the co-payment, a reduction in the co-payment by one Euro increased the per capita number of prescriptions by 3.4%, and per capita public pharmaceutical expenditure by 4.9%.

The Barnett Allocation Mechanism: Formula Plus Influence?

Christie A. and Swales J. K. The Barnett allocation mechanism: formula plus influence?, Regional Studies. This paper seeks to explain why the operation of the Barnett formula has failed to generate convergence in the per capita public expenditure levels in the four countries of the United Kingdom. Using Scotland as an example, this paper argues that a ‘formula plus influence’ allocation mechanism has been in place. This offers improved flexibility, greater political integration, and increased information flows than would be available through either a straight bargaining or a formula process. While devolution has not changed the Barnett formula, it has altered the environment in which it operates and that this may well destabilize an otherwise secure system. Christie A. et Swales J. K. La méthode d'affectation Barnett: formule plus influence?, Regional Studies. Cet article cherche à expliquer pourquoi l'application de la formule Barnett n'a pas réussi la convergence des dépenses publiques par tête dans les quatre pays du R-U. En se servant de l'Ecosse comme étude de cas, l'article affirme qu'une méthode d'affectation ‘formule plus influence’ a été en vigueur. Cela fournit une flexibilité augmentée, une intégration politique plus importante et des flux d'information accrus qui n'auraient été disponibles par moyen de simples négociations ou d'une simple formule. Tandis que la régionalisation n'a eu aucun impact sur la formule Barnett, elle a changé le milieu auquel il se voit appliquer, et cela pourrait bien déstabiliser un système par ailleurs solide. Formule Barnett Régionalisation Décentralisation fiscale Ecosse Finances publiques Christie A. and Swales J. K. Der Barnett-Zuweisungsmechanismus: Formel plus Einfluss?, Regional Studies. In diesem Beitrag wird eine Erklärung für die Frage gesucht, warum sich mit der Barnett-Formel in den vier Ländern des Vereinigten Königreichs keine Konvergenz hinsichtlich der Höhe der öffentlichen Pro-Kopf-Ausgaben erzielen lässt. Anhand des Beispiels Schottland wird argumentiert, dass bei der Zuweisung ein Mechanismus von der Art ‘Formel plus Einfluss’ zum Einsatz kam. Dies führt im Vergleich zu einem einfachen Verhandlungs- oder Formelprozess zu einer Verbesserung der Flexibilität, der politischen Integration und des Informationsflusses. Die Dezentralisierung hat die Barnett-Formel nicht verändert, wohl aber die Umgebung, in der sie zum Einsatz kommt, was durchaus zur Destabilisierung eines ansonsten sicheren Systems führen kann. Barnett-Formel Dezentralisierung Fiskale Dezentralisierung Schottland Staatsfinanzen Christie A. y Swales J. K. El mecanismo de la asignación Barnett: ¿fórmula más influencia?, Regional Studies. El objetivo de este artículo es explicar el porqué la operación de la fórmula Barnett no ha generado una convergencia en los niveles de gastos públicos per cápita en las cuatro regiones del Reino Unido. Usando Escocia como ejemplo, en este ensayo argumentamos que se ha introducido un mecanismo de asignación tipo ‘fórmula más influencia’. Esto ofrece una mejor flexibilidad, mayor integración política y más flujos de información comparado con un proceso a través de negociaciones directas o de fórmulas. Aunque la transferencia de competencias no ha cambiado la fórmula Barnett, sí que ha alterado el entorno en el que funciona y esto bien podría desestabilizar un sistema que normalmente es seguro. Fórmula Barnett Transferencia de competencias Descentralización fiscal Escocia Finanzas públicas