Expenditure Composition Research Articles

The short and the long run relationship between fiscal decentralization and public expenditure composition in Italy

This article is an original contribution to the understanding of the relationship between fiscal decentralization and public expenditure composition. Relying on recent panel cointegration techniques, our findings show that the level of decentralization influences the expenditure composition of the Italian regional administrations in the long run.

An Analysis of State–Local Government Capital Expenditure During the 2000s

Capital expenditure by subnational governments in the United States represents about two percent of GDP and 12 percent of state–local spending. Persistent differences among states exist in the amount and composition of this capital expenditure. This regression‐based research examines for the decade of the 2000s: (1) the factors affecting capital spending and interstate differences; (2) the effect of recessions; (3) the response to American Recovery and Reinvestment Act (ARRA) stimulus funds; (4) state and year fixed effects; and (5) investment for highways and K‐12 education. Aggregate capital expenditure is relatively stable, although it increased around recessions, with ARRA grants especially important and substantial state‐specific influences.

Determinants in Tourist Expenditure Composition — The Role of Airline Types

The reduction in transportation costs when travelling with a low-cost airline (LCA) seems to have modified the composition of the trip budget. An understanding of expenditure composition when comparing LCA and legacy airline travellers is vital for destination marketers. Using micro official statistics data for air travellers to Spain in 2010 and the compositional data analysis (CODA) methodology, this study analyses the determinants of trip budget composition and its differences between airline types. The authors consider transportation expenses, as well as basic (accommodation and food) and discretionary (activities, shopping, etc) at-destination expenses. Log-ratios of budget share are fitted to a MANOVA, with travellers' attributes as explanatory factors along with the moderating effect of the airline type. Among the findings are that high-income LCA travellers spend relatively more at the destination, LCA tourists travelling with friends have a larger share of discretionary expenses, and highly educated travellers have a larger share of discretionary expenses for both airline types.

Abnormal functional responses of osteoblasts to leptin in adolescent idiopathic scoliosis

Objective Leptin has been postulated as one of the etiologic factors of AIS because of its important physiological functions in neuro-osseous development affecting skeletal growth, the onset of puberty, energy expenditure and body composition. Previous studies on the relationship between leptin and HR-pQCT derived bone quality parameters had found abnormal correlations in AIS girls, and suggested possible abnormalities in the leptin regulated bone metabolic pathways. Another study on AIS patients showed hyposensitivity to leptin in bone marrow derived mesenchymal stem cells This study aimed to investigate the effect of leptin on the functional responses of osteoblasts in AIS girls, and compare with that of controls.

Patterns of Health Expenditures and Financial Protections in Vietnam 1992-2012.

Health financing has been considered as an important building block of a health system and has a key role in promoting universal health coverage in the Vietnam. This paper aims to describe the pattern of health expenditure, including total health expenditure and composition of health expenditure, over the last two decades in Vietnam. The paper mainly uses the data from Vietnam National Health Account and Vietnam Living Standards Survey. We also included data from other relevant published literature, reports and statistics about health care expenditure in Vietnam. The per capita health expenditure in Vietnam increased from US$ 14 in 1995 to US$ 86 in 2012. The total health expenditure as a share of GDP also rose from 5.2% in 1995 to 6.9% in 2012. Public health expenditure as percentage of government expenditure rose from 7.4% in 1995 to nearly 10% in 2012. The coverage of health insurance went up from 10% in 1995 to 68.5% in 2012. However, health financing in Vietnam was depending on private expenditures (57.4% in 2012). As a result, the proportion of households with catastrophic expenditure in 2012 was 4.2%. The rate of impoverishment in 2012 was 2.5%. To ensure equity and efficient goal of health system, policy actions for containing the health care out-of-pocket payments and their poverty impacts are urgently needed in Vietnam.

Do Democracies Spend Less on the Military? Spain as a Long-Term Case Study (1876-2009)

This paper analyses the influence of political regimes on the level and the economic composition of military expenditure in Spain over the long run. The results suggest that political and strategic variables exerted a significant effect on both the total and the disaggregated military burden throughout the period. The democratic governments established in the late 1970s and the early 1980s exerted a positive influence on the military burden due to the efforts to reorient the army towards international threats and to involve the armed forces with the newly democratic institutions. These results partially challenge the widely accepted negative relation between democracy and military spending and pose the need for further analyses on political transitions. Additionally, the analysis on the military expenditure composition allows concluding that the international orientation of democratic military policies went along with financial efforts to get a smaller and better equipped army, to confront international military threats.

PP180-MON: Energy Expenditure and Body Composition Markers Measured by Dexa: An Exploratory Survey in Overweight/Obese Adult Subjects

PP180-MON: Energy Expenditure and Body Composition Markers Measured by Dexa: An Exploratory Survey in Overweight/Obese Adult Subjects

Population aging, consumption budget allocation and sectoral growth

This paper assesses the heterogeneous effects of population aging on personal budget allocation across sectors. Using China's household survey data, we break down each household expenditure component into its constituent members. We find consistent and robust age profiles of the composition of personal consumption expenditures. Young people spend larger proportions of their budget on food and education, culture, and recreation services. The middle-aged spend significantly more on clothing and transportation and communication. Lastly, the elderly spend substantially more on food and health care and medical services. After controlling for period and cohort effects as well as other socio-economic factors, we still find age to be a fundamental driver of consumption budget allocation. We also incorporate the estimated results into the population forecast data and predict the evolution of China's consumption budget allocation patterns driven by demographic change.

Do political determinants affect revenue collection? Evidence from the Indian states

In a recent study, Dash and Raja (2013) have shown that the size and composition of public expenditure of Indian states are systematically linked with political determinants such as the extent of government fragmentation, strength of opposition, electoral years, and ideology. This study extends the questions to whether there are similar links to revenue collections by the governments that rule the different states in India. Using the same time period of the previous study, four revenue measures related to tax collection and internal debt are considered and four different sets of hypotheses are developed by linking the political determinants with each of the revenue measures. The overall findings of the study suggest that the government-specific political determinants are significant and robust determinants of revenue collections of the Indian states.

Convergence of public expenditures and implementation of a single model of public finances in the European Union

The paper analyses whether the composition of public spending is converging in the European Union. The novelty of the paper lies in the use of different techniques from traditional beta and sigma convergences, of the economic and functional classifications of public spending, and of two measures of the size of public expenditure: as percentage of GDP and total public expenditures. The tests do not detect a convergence of the composition of public expenditures, mainly when the composition of public expenditures is measured as a percentage of total public expenditures

The sectoral reallocation of government purchases as budgetary-neutral stabilisation tool: a model-based analysis

The paper uses a two-sector DSGE model with nominal and real rigidities to analyse the stabilising properties of fiscal policy rules in a small open economy in monetary union. The focus is on the potential of budgetary-neutral rules that adjust the composition of government purchases between tradable and non-tradable goods in response to business cycle indicators as a stabilisation tool when fiscal limits are tight. The paper finds that the state-dependent reallocation of government purchases between tradable and non-tradable goods stabilises domestic activity and reduces the welfare costs of economy-wide and sector-specific shocks. Potential welfare gains from such policy rules are higher than welfare gains from standard counter-cyclical fiscal policy rules that adjust the overall level of government purchases. Contrary to standard deficit spending policies, the state-dependent expenditure composition rules avoid the trade-off between, first, counter-cyclical spending and, second, consolidation needs in economic downturns in the presence of explicit or implicit deficit and debt limits.

Abstract 621: Mice Lacking Prostaglandin E Receptor Subtype 4 Resist Diet-Induced Obesity Despite Hypertriglyceridemia

Objectives: Activation of prostaglandin E receptor subtype 4 (EP4) may suppress inflammation by regulating nuclear factor kappa B (NFκB). Indeed, chronic inflammation usually is accompanied by dyslipidemia. Thus, the present study tested the hypothesis that deletion of EP4 can accelerate the occurrence of metabolic syndrome Methods: EP4 wild-type and knockout mice were put on a high-fat diet (HFD) for thirty weeks. Body weight and food consumption were monitored. In addition, energy expenditure and fat composition were determined by indirect calorimetry and Minispec body composition analyzer, respectively. The impact of EP4 deletion on the ability to synthesize hepatic very low density lipoprotein (VLDL)-triglyceride (TG) and intestinal chylomicron (CM)-TG, as well as the ability to clear TG during HFD was examined. Circulating lipoprotein lipase (LPL) activity and tissue LPL activity were determined using a fluorometric assay kit and mRNA expression of lipid metabolism-related genes in adipose tissue was measured by quantitative polymerase chain reaction (Q-PCR). Results: After consuming a high-fat diet for thirty weeks, EP4 knockout mice exhibited reduced body weight gain and body fat mass, not attributable to changes in food intake, fat malabsorption and energy expenditure. However, EP4 knockout mice had a higher plasma TG level than wild-type mice. The deletion of EP4 did not influence hepatic VLDL-TG production or intestinal CM-TG synthesis but impaired TG clearance rate. EP4 knockout mice had a decreased circulating LPL activity, reduced LPL activity in epididymal fat and skeletal muscle, suggesting impaired hydrolysis and uptake of triglycerides in these tissues. Moreover, EP4 knockout mice had a reduced expression of CD36 in brown adipose tissue, which may indicate that the uptake of fatty acids is impaired. Conclusions: High-fat feeding of EP4 knockout mice resulted in a lean body phenotype, but caused hypertriglyceridemia resulting from impaired TG clearance, attributed to reduced LPL activity and expression of CD36. The results indicate that EP4 plays a critical role in systemic lipid homeostasis.

Is the value of environmental goods sensitive to the public funding scheme? Evidence from a marine restoration programme in the Black Sea

In this paper, we conduct choice experiments in Turkey and Ukraine on the valuation of a marine restoration programme in the Black Sea, to examine whether the value of environmental goods is sensitive to the source of public financing. We contribute to the debate on the optimal composition of public expenditure, an issue that can be controversial in times of financial crises. We discriminate between two funding regimes through the reallocation of public spending. The first proposes financing the marine restoration programme by reducing public expenditure for investments in renewable energy, and the second by reducing public expenditure for civil servants’ training. The results reveal that the marginal value of public money depends on the funding source. Furthermore, attribute values are sensitive to the trade-off implied by the funding scheme. The magnitude of the results differs in the two countries considered, because of their heterogeneity in political and cultural dimensions.

A Comprehensive Analysis of Expenditure Decentralization and of the Composition of Local Public Spending

Sacchi A. and Salotti S. A comprehensive analysis of expenditure decentralization and of the composition of local public spending, Regional Studies. Many industrialized countries have recently implemented fiscal decentralization reforms assigning more spending responsibility to sub-national governments. This paper investigates the causes of the decentralization of different categories of public expenditure in 19 developed countries over the period 1980–2006. Different models for each of the spending functions under analysis are estimated adopting a general-to-specific empirical approach. Results confirm existing findings on the negative link between regional income disparities and expenditure decentralization. A similarly negative relationship is found for a set of demographic variables, leading to the conclusion that macroeconomic and, more importantly, political factors are responsible for the recent increase in decentralization. Finally, the analysis is completed by a study of the factors driving sub-national expenditure composition, with political and demographic changes emerging as the most important determinants.

Exploring Small Area Demand for Grocery Retailers in Tourist Areas

This paper uses data from a major loyalty card scheme to draw insights about the characteristics of grocery expenditure by tourists. The authors explore the volume, value and composition of store-based visitor expenditure using consumer data from the loyalty card scheme. They focus on grocery spending at selected stores in Cornwall, a popular tourist destination in South West England. The loyalty card data provide a valuable source rarely available for academic investigations. The authors are able to analyse visitor spend by socio-economic and geodemographic characteristics, drawing a range of comparisons with residential demand from within the store catchment areas. They demonstrate that visitor grocery expenditure is complex and varies by store, destination and type of customer. The paper presents evidence to suggest that the current approaches used to estimate sales uplift and local-level economic impact from visitor demand are unable to account for the complexities of this form of expenditure. Based on these insights, the authors recommend that sophisticated modelling is employed to estimate the impact of visitor expenditure.

Fiscal equalization, government expenditures and endogenous growth

This paper analyzes the effect of a fiscal equalization system on the composition of government expenditures of subnational governments. We incorporate vertical equalization transfers with optimal choice of the composition of government expenditures in an endogenous growth model and show that such transfers reduce the incentives of recipient subnational governments to undertake productive expenditures. Using data for Canadian provinces, we find evidence that, after controlling for a number of determinants of government expenditures, the ratio of productive expenditures to total government expenditures was lower in equalization-receiving than non-receiving provinces.

Government size, composition of public expenditure, and economic development

This paper analyzes the effects of government size and of the composition of public expenditure on economic development. Using the system-GMM estimator for linear dynamic panel data models, on a sample covering up to 156 countries and 5-year periods from 1980 to 2010, we find that government size as a percentage of GDP has a quadratic (inverted U-shaped) effect on the growth rate of the Human Development Index (HDI). This effect is especially pronounced in developed and high-income countries. We also find that the composition of public expenditure affects development, with the share of five subcomponents exhibiting nonlinear relationships with HDI growth.

The impact of within-party and between-party ideological dispersion on fiscal outcomes: evidence from Swiss cantonal parliaments

The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a feature of politics that has attracted considerable attention from economists. However, previous authors have abstracted from two important concepts: ideology and intra-party politics. In this paper, we account for these two phenomena explicitly, and make two main contributions. First, we show that both intra- and inter-party ideological dispersion matter in explaining the level of sub-national public spending. Therefore, it is improper to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003–2010) comprising data from a survey that quantifies the policy preferences of party members who were candidates in Swiss elections.

A Comprehensive Analysis of Expenditure Decentralization and of the Composition of Local Public Spending

Many industrialized countries have recently implemented fiscal decentralization reforms assigning more competences and spending responsibilities to sub-national governments. In this paper we investigate what leads to the decentralization of different categories of public expenditure in 19 developed countries over the period 1980-2006. Adopting a general-to-specific empirical approach, we estimate different models for each of the spending functions under analysis. Our results confirm existing findings on the negative link between regional income disparities and expenditure decentralization. A similarly negative relationship is found for a set of demographic variables, leading to the conclusion that macroeconomic and, more importantly, political factors are the key to explain the recently increased decentralization levels in most industrialized countries. Finally, we complete our analysis by studying what determines the sub-national expenditure composition, finding that political and demographic changes are the most important factors in shaping the local spending mix.

Public infrastructure investment and fiscal sustainability in Latin America: incompatible goals?

Purpose– This paper aims to understand the relationship in developing countries between fiscal consolidation and public investment – a flexible part of the budget that is easier to cut during consolidation effort, but with potentially negative growth effects. Analyzing in detail the case of Peru, the paper explores alternative fiscal rules and frameworks that might help create fiscal space for infrastructure investment.Design/methodology/approach– The paper analyses trends in public and total infrastructure investment in six large Latin American economies, in the light of fiscal developments since the early 1980s. In particular, the paper explores the association between fiscal consolidations (improvements in the structural fiscal balance) and public infrastructure investment rates. In the second part, the paper analyzes recent changes in the fiscal framework of Peru and shows how they were conductive in creating additional fiscal space.Findings– The authors argue that post-crisis fiscal frameworks, notably fiscal rules that are increasingly popular in the region, should not only consolidate the recent progress towards debt sustainability, but also create the fiscal space to close these infrastructure gaps. These points are illustrated in a detailed account of recent developments in the fiscal framework and public investment in the Peruvian case.Originality/value– The paper contributes new evidence to the literature on fiscal consolidation and the composition of government expenditures. While the literature based on evidence from the 1990s has argued that fiscal consolidation plans in Latin America have almost always led to a significant reduction in public infrastructure investment, the paper finds less clear cut evidence when extending the analysis backwards (1980s) and forwards (2000s). The example of the case of Peru is used to explore fiscal institutions and rules that might be useful for other developing countries that face important infrastructure gaps.