Government fiscal health is intrinsically linked to the cyclic regularity of national economic activity. However, fiscal management can be stabilized if the underlying governance framework maintains consistency in economic and social policy implementation. This study analyses the fiscal management of the South Korean government with a specific focus on the composite index of business indicators. The research explores the important role of strategic policy alignment in maintaining fiscal sustainability, evaluating production activity performance in the context of national finance. The study utilizes longitudinal trends from South Korea to assess how fiscal management adapts to business cycle indicators. Findings suggest that proactive and consistent policy governance reduces the need for disruptive fiscal adjustments during economic downturns. The research provides actionable insights for policymakers regarding the integration of business cycle signals into long-term national financial governance.© The Author(s) 2026. Published by RITHA Publishing. This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited maintaining attribution to the author(s) and the title of the work, journal citation and URL DOI.Article’s history: Received 10th of January, 2026; Revised 27th of January, 2026; Accepted for publication 10th of February, 2026; Available online: 15th of February, 2026; Published as article in Volume II, Issue 1(3), 2026.

This study provides a rigorous assessment of Saudi Arabia’s fiscal sustainability over 1991–2023 using an advanced ARDL framework that simultaneously captures short-run fiscal dynamics and long-run equilibrium behavior. Modeling the fiscal balance as a function of government revenue, expenditure, and public debt (as shares of GDP), and supported by mixed orders of integration in the data, the ARDL bounds test confirms a stable long-run cointegrating relationship among the fiscal variables. The error-correction term is highly significant and large in magnitude, indicating rapid reversion of fiscal imbalances toward equilibrium. Structural break tests identify a major regime shift around 2016, reflecting the combined effects of the oil price collapse and the institutional reforms introduced under Vision 2030. Long-run estimates reveal that government revenue is the principal determinant of fiscal sustainability, whereas expenditure and public debt exhibit weaker long-run effects. Short-run dynamics show that the fiscal balance responds sharply and asymmetrically to changes in revenue and spending, underscoring its sensitivity to policy adjustments and external shocks. Extensive robustness checks—stability diagnostics, causality tests, and residual analysis—validate the coherence of the estimated model. Overall, the findings contribute to the fiscal sustainability literature by offering country-specific evidence that incorporates structural breaks and institutional reforms into an ARDL framework, demonstrating that Saudi Arabia’s post-2016 policy transformation has materially strengthened the economy’s long-run fiscal adjustment mechanism.

We study the dynamic impact of intergovernmental transfers on local government budgets. Unlike the extensive literature that focuses primarily on developed countries, this paper shifts the focus to the developing world. Using Argentina as an ideal case of a multi-tiered government and employing dynamic analytical methods, we disentangle the nature of local fiscal adjustments following a shock in transfers from the intermediate level of government. In the short run, transfers lead to increases in both spending and own tax revenues. As the growth of spending outpaces that of own tax revenues, a deficit emerges. In the long run, local governments restore fiscal balance by adjusting both spending and taxation to levels consistent with a balanced budget. The steady-state equilibrium involves a higher level of public spending, driven by the endogenous growth of transfers. These findings are robust to a battery of robustness checks. We further extend the analysis by examining: the composition of spending and own tax revenues throughout the fiscal adjustment process; the role of local government size; and the influence of conditionality in certain types of transfers -an aspect often overlooked in the literature, but highly relevant for shaping results. Finally, we offer a comparative discussion that places our findings within the broader literature. Overall, the paper provides valuable insights for the design of local fiscal policy.

The implementation of the self-assessment tax system in Indonesia is often hindered by regulatory complexity, which triggers compliance issues related to Corporate Income Tax. This phenomenon is highlighted in PT NA, a subsidized LPG distributor, which experienced significant divergence between commercial and fiscal financial statements due to subsidized and non-subsidized transactions. The main objective of this study is to analyze the causes of these differences and examine the implications of the fiscal reconciliation process on the calculation of payable Corporate Income Tax. A quantitative-qualitative case study was conducted at PT NA using the 2021 financial statements that had not been optimally reconciled. The analysis was carried out by comparing commercial Profit and Loss with tax regulations (Article 6 and 9 of the Taxation Law). The main results show the existence of Positive Fiscal Adjustments amounting to IDR 8,978,421,881 and Negative Fiscal Adjustments amounting to IDR 9,046,380,000. These adjustments changed the Taxable Income to IDR 870,136,000 and Underpaid Tax to IDR 133,314,700, indicating substantial adjustments from the initial report. It is concluded that fiscal reconciliation is highly crucial and significantly changes the amount of payable Corporate Income Tax. Inaccuracy in this process risks triggering disputes and fiscal sanctions. Practically, this study serves as an important reference for PT NA and similar entities to reconstruct accurate fiscal reports in order to ensure tax compliance.

<span>This paper examines the effects of shrinking fiscal space and the resulting fiscal consolidation on private and public expenditure in research and development (R&D). In a sample of OECD countries, we find R&D expenditure strongly influenced by the available fiscal space, with this relationship being particularly pronounced in less innovative countries. To better understand this relationship, we further explore a potential transmission channel: fiscal consolidation. Our analysis shows that the spending cuts in public allocations to R&D driven by fiscal adjustments are more pronounced in less innovative countries, suggesting the presence of a doom loop between consolidations and low domestic R&D intensity. Finally, the composition of consolidations matters: tax-based adjustments have a significantly negative impact on total domestic R&D spending, primarily due to the sharp contraction they induce in business R&D investments.</span>

The implementation of the single salary policy by the central government constitutes a strategic initiative to reform the national remuneration system for civil servants. In addition to simplifying income components, this policy produces administrative, fiscal, and institutional consequences at the regional level. West Papua Province, with its distinctive geographical characteristics and fiscal capacity, faces particular challenges in adapting to this reform agenda. This study aims to analyze reforms in the income structure of civil servants following the implementation of the single salary policy within the West Papua Provincial Government in 2026. Using a qualitative research design, the study employs policy analysis methods through a comprehensive review of regulatory documents, in-depth interviews with key government officials, and observation of regional income management practices. The findings reveal that the single salary policy significantly alters the structure of additional income allowances and shapes civil servants’ perceptions of welfare, fairness, and income equity. Furthermore, effective implementation depends on institutional preparedness and fiscal adjustments to prevent disruptions in personnel management and bureaucratic performance. This study emphasizes the necessity of integrating local contextual factors into the execution of national policies, particularly within the broader framework of bureaucratic reform in regions granted special autonomy.

The article investigates the sustainability of fiscal consolidation from a dual perspective: logical-economic and institutional, with a focus on the interaction between fiscal adjustment strategies and the broader governance framework. The study goes beyond the restrictive accounting approach of consolidation, arguing that sustainability depends both on the logical coherence of fiscal policy design and on the institutional robustness of implementation mechanisms. Methodologically, the analysis combines the conceptual assessment of the logical consistency of fiscal rules with an empirical examination of the institutional arrangements that shape budgetary outcomes in Romania and the European Union. The results show that sustainable consolidation involves more than meeting deficit and debt thresholds: it depends on the credibility of tax institutions, administrative capacity and the integration of fiscal strategies into long-term growth and social resilience objectives. Moreover, research suggests that credible institutions and rule-based frameworks reduce procyclical biases and increase fiscal discipline, while fragile governance erodes the effectiveness of consolidation efforts. The contribution of the article is to articulate a bridge between the logical models of fiscal coherence and the institutional economics of governance, highlighting the need for gradual consolidation strategies, anchored in clear and institutionally integrated rules.

Purpose. To evaluate the socio-economic determinants of tax-system sustainability within the Sustainable Development Goals framework for 28 European Union countries and Ukraine in 2023–2024. Methodology. A cross-country dataset of nine independent indicators was compiled for 28 national economies. Factor analysis was applied to identify latent drivers of tax-system sustainability, followed by cluster analysis to group countries by similar profiles and to assess the stability of country positions over time. A comparative assessment focused on Ukraine, where martial law remains in force. Findings. A four-factor structure was established: (F1) resource load and environmental consequences; (F2) economic structure and tax burden; (F3) socio-economic tension; (F4) economic well-being. Factors F1, F2, and F4 are positively associated with the sustainability of national tax systems, whereas F3 acts in the opposite direction. Countries exhibit marked heterogeneity across factors; cluster membership remained largely stable between 2023 and 2024, with Portugal as the sole reclassification. The factor-based assessment (FI) revealed country-specific risks and priorities for fiscal adjustment. The Ukraine–EU comparison demonstrated consistent patterns within the assigned clusters, considering the dynamics of actual factor values. Originality. The study operationalizes tax-system sustainability through an integrated four-factor construct that jointly captures environmental pressure, fiscal-structural characteristics, social stress, and economic well-being, and tests cluster stability on a recent EU–Ukraine panel. Practical value. The results provide a transparent diagnostic for risk-sensitive tax-policy design aligned with sustainable development. They support the identification of targeted measures and sequencing of reforms; for Ukraine, they inform adaptive fiscal decisions under martial law and during economic recovery.

This paper analyses Argentina’s fiscal policy transformation under President Javier Milei as a case of radical fiscal consolidation implemented under conditions of extreme macroeconomic instability and weak institutional credibility. Drawing on a contrastive single-case design, the study examines whether rapid and expenditure-based fiscal adjustment can coincide with short-term macroeconomic stabilisation and shifts in confidence-related expectations. Using validated data from international institutions, the analysis documents a simultaneous weakening of inflation dynamics, a marked reduction in the primary fiscal deficit, changes in investment-related indicators and declining sovereign risk premiums during the first year of reform implementation. While no causal attribution of individual policy measures is possible, the observed developments challenge the assumption that rapid fiscal consolidation necessarily entails short-term macroeconomic disruption. The paper situates these findings within the literature on fiscal credibility, executive self-commitment and expectation formation, arguing that under specific political and institutional conditions fiscal credibility may emerge not only through formal rules but also through consistent executive action and visible policy breaks. At the same time, the analysis emphasises the strong context dependence and limited transferability of such reform paths. Rather than presenting Argentina as a reform model, the paper conceptualises the Milei reform agenda as an analytical borderline case of fiscal self-correction. The contribution lies in differentiating potentially transferable elements of fiscal control from strictly context-specific conditions and in reframing fiscal consolidation as a credibility-driven control architecture rather than a purely quantitative adjustment of government spending. Keywords: Fiscal Consolidation, Austerity and Growth, Argentina Economic Reform, Investment Confidence, State Retrenchment

Abstract The existence of a common currency and further integration within the European Monetary Union crucially depends on public legitimacy. As a response to the Global Financial Crisis and subsequent Sovereign Bond crisis, several European governments have implemented fiscal consolidation policies in an attempt to restore investors' confidence. According to its critics, though, austerity has also weakened public confidence in the European Union and its most visible economic symbol, the euro. Unfortunately, the simultaneity of recessions and fiscal consolidation makes it hard to disentangle the two effects empirically. Does austerity really decrease public support for the euro, or are they both explained by the macroeconomy? In this paper, we attempt to solve this puzzle relying on a rich dataset of fiscal adjustments that are weakly exogenous to the business cycle. The statistical analysis of a panel of 19 European countries and Eurobarometer surveys conducted therein between 2004 and 2019 suggests that fiscal consolidation in general, and expenditure‐based fiscal consolidation more specifically, affected support for the Euro negatively but that this effect is modest. We also find that these effects are conditional on both individuals' self‐placement on the political spectrum and their employment status.

São Tomé and Príncipe (STP) is confronting a challenging macroeconomic environment marked by unfavorable demographic trends, an energy crisis, and delays in the energy transition. As a result, GDP growth forecasts have been revised downward, and an additional balance of payments gap is projected. Against this backdrop, the authorities are requesting a 12-month extension of the 40-month ECF arrangement approved in December 2024, along with an augmentation of SDR 4.44 million (30 percent of quota), bringing total access to 155 percent of quota, combined with a more gradual and less front-loaded path for fiscal adjustment, on the heels of the large cumulative fiscal consolidation since 2022.

This study aims to analyze the direct impact of global oil price fluctuations on the ‎spending patterns of Iraqi households, focusing on a field survey study in the ‎governorates of Baghdad and Basra. The importance of the research stems from the ‎rentier nature of the Iraqi economy and its high dependence on oil revenues, which ‎makes it vulnerable to economic shocks whose effects are transmitted to the micro ‎level, that is, households. Although there have been previous studies on the impact ‎of oil prices on macro variables, there is a clear research gap in understanding how ‎households respond and adapt to these fluctuations at the level of their daily spending. ‎The study relied on the descriptive analytical approach with a quantitative design, ‎where data were collected from a suitable sample of 1500 completed questionnaires ‎from families in Baghdad and Basra. The questionnaire included demographic, so-‎cial, and economic information, as well as questions about household spending patterns and changes, their awareness of the impact of oil fluctuations, and the fiscal ‎adjustment mechanisms followed. The data were analyzed using descriptive statistics (frequencies and percentages) and cross-tabulations to explore relationships ‎between variables.‎ Key findings revealed a measurable impact of oil price fluctuations on Iraqi households' spending patterns. Low-income households showed a significant increase in ‎their spending on basic goods (such as food), while significantly reducing their ‎spending on luxuries and leisure. Recourse to borrowing has also been shown to be ‎a common coping mechanism, especially among retirees. The study confirmed that ‎the size of the family affects the extent to which it is affected, as larger families suffer from greater financial pressure in meeting basic needs. Overall, the majority of ‎households in both cities perceived a negative impact of oil fluctuations on their ‎livelihood stability‎.

Introduction: This study aimed to analyze the strategies implemented by the Health Office of Palu City in realizing a Healthy City, as part of Indonesia’s national movement toward achieving the World Health Organization (WHO) Healthy City framework. The program emphasizes cross-sector collaboration and active community participation, which remain crucial in addressing challenges of urbanization, social inequality, and limited health infrastructure. Methods: A qualitative case study design guided by Parsons’ AGIL functional framework was applied to explore adaptive, integrative, goal-oriented, and latent dimensions of health governance. Data were collected through in-depth interviews, observations, and document reviews involving key stakeholders such as health officials, community leaders, health cadres, and social organizations (e.g., PKK and NGOs). Data were analyzed thematically using NVivo 12 Plus. Ethical clearance was obtained, and all participants provided informed consent. Results: The findings revealed that the Health Office strategies were categorized into the four AGIL functional dimensions: (1) Adaptation, through fiscal adjustment and program prioritization; (2) Integration, via inter-sectoral coordination and disaster response mechanisms; (3) Goal Attainment, through leadership alignment with municipal health targets; and (4) Latency, through sustained community participation and cadre-led education. These strategies strengthened social structures, communication forums, and community-based initiatives such as GERMAS and open defecation elimination. Despite these efforts, key barriers persisted—namely, limited budget allocation, weak cross-sectoral institutionalization, and uneven citizen engagement across subdistricts. Conclusion: The study concludes that a socially grounded, AGIL-informed collaborative strategy adopted by the Health Office is effective in promoting the WHO Healthy City initiative within Indonesia’s decentralized governance context. These findings contribute theoretically to the discourse on social determinants of health and systems theory, and offer practical implications for strengthening local government capacity, budgeting, and inter-sectoral health policies.

This paper analyzes the impact of fiscal policy on inflation expectations across a large sample of advanced economies (AEs) and emerging market economies (EMs). We identify episodes of significant fiscal adjustment using both quantitative thresholds and a narrative approach and find that such episodes are associated with statistically significant changes in inflation expectations in EMs while the responses are muted in AEs. We also document that the relationship between fiscal policy and inflation expectations is more pronounced in high-inflation environments and under weak fiscal positions. Additionally, we explore how market perceptions of sovereign risk, as well as monetary and exchange rate frameworks, influence the transmission of fiscal policy to inflation expectations. Our empirical results suggest that it is especially important for EMs to implement prudent fiscal policy as it may help reduce inflationary pressures and inflation expectations.

Abstract This paper examines the relationship between fiscal and current account imbalances, commonly referred to as the “twin deficits,” in tourism-dependent versus non-tourism developed economies. Using annual data from 2000 to 2020, the analysis employs Difference-in-Differences panel regression (DiD-PR), panel unit root tests, Panel Generalized Method of Moments (PGMM), and Granger causality tests (GCT). The findings indicate that fiscal and external balances align consistently with the Current Account Targeting Hypothesis (CATH) across the Total and Control Country datasets, suggesting fiscal adjustments to external imbalances. In tourism-dependent economies, initial PGMM estimates show marginal support for CATH, which strengthens with robustness checks and causality tests. DiD-PR results confirm that tourism exposure significantly mediates the fiscal–external balance nexus. These findings highlight the structural distinctiveness of tourism-driven economies and provide policy insights for tailoring fiscal strategies in tourism-reliant versus diversified developed countries.

This paper examines sovereign debt risks in the European Union, which has centralized monetary policy within the euro area, while fiscal policies remain national. Institutional reforms, including common banking supervision, the European Stability Mechanism, the European Central Bank’s market-stabilisation instruments, and a new set of fiscal rules, have mitigated vulnerabilities arising from the interdependence between banks and sovereigns. Stochastic debt sustainability analysis suggests that debt remains sustainable in most EU countries, although substantial fiscal adjustments will be required in some cases. Fiscal reaction function estimates, however, reveal a weakening policy response to rising debt, signalling increased medium-term risks. The paper argues that further adaptation of fiscal rules is needed to encourage investment and provide greater flexibility for low-risk countries. Expanding the pool of common EU safe assets could also help break the bank-sovereign doom-loop, attract foreign investors, and strengthen fiscal sustainability.

Europe has managed major shocks, but growth is slowing, export gains are reversing due to tariffs, and bond markets reflect rising risks. Interest rate cuts and increased fiscal spending, including defense, have not spurred private demand. The productivity gap with the US remains wide, and structural reforms are lagging. National priorities and slow EU decision-making hinder deeper integration of capital, labor, and product markets. Without stronger growth and fiscal consolidation, average European debt could reach 130 percent of GDP by 2040, requiring significant fiscal adjustment. Near-term policies should maintain price stability, start fiscal consolidation, and keep trade open.

Tax audit serves as a strategic instrument in the government’s efforts to enhance state revenue. However, its implementation in the field has not yet fully achieved the established targets, as indicated by the substantial number of fiscal adjustments to income and expense components that do not comply with tax regulations. This study aims to analyze the effectiveness of tax audit implementation on the Annual Income Tax Return (SPT) of corporate taxpayers at the Primary Tax Office (KPP Pratama) Padang Sidempuan, under the Regional Office of the Directorate General of Taxes (DJP) North Sumatra II. The research method employed is a descriptive qualitative approach through field observations and interviews. The results reveal that the effectiveness of tax audit implementation remains suboptimal. This condition is attributed to the decline in tax audit revenue realization, delays in the submission of tax returns by taxpayers, and the limited number of tax auditors relative to the size of the working area and audit targets. Nevertheless, the implementation of tax audits at KPP Pratama Padang Sidempuan continues to demonstrate a high level of integrity, as reflected in adherence to procedures, transparency, effective communication, and adequate supporting facilities and infrastructure.

This paper examines the structural embeddedness of China's fiscal policy and the international labor movement within the capitalist world system, emphasizing their dynamic interplay and mutual influence. By utilizing the extended framework of world-systems theory, this study explores how global labor movements have historically driven capitalist world-systems transformations and how China’s fiscal adjustments have facilitated their integration into the capitalist system. The analysis highlights the structural contradictions between capitalism and democratization, illustrating how these tensions manifest through fiscal policy, labor movements, and global value chain dynamics. The paper argues that China’s fiscal strategies, particularly during its reform and opening-up period, not only deepened its integration into the global system but also shaped labor‒capital relations worldwide. This research contributes to understanding how fiscal policy serves as a critical tool for navigating structural challenges in a globalized economy.

Introduction/Main Objectives: This research aims to determine the amount of corporate income tax for PDAM Ngawi Regency in 2021 after fiscal reconciliation. Background Problems: There are several components in the financial statements, such as depreciation of fixed assets, representation fees, and meeting consumption costs that do not follow tax provisions. This creates a difference between commercial profit and fiscal profit, which impacts the calculation of taxes payable. Novelty: Using BUMD as an object provides a new perspective in implementing fiscal reconciliation in entities owned by local governments. Research Methods: This research uses descriptive quantitative research. The data sources used are secondary data. The data analysis technique uses steps to make fiscal adjustments to the profit and loss report. Calculate fiscal net income by multiplying it by the corporate income tax rate to calculate the tax payable. Compare the calculation of corporate income tax payable between commercial and fiscal. Finally, the tax owed will be calculated, the differences identified, and the contributing factors will be concluded. Findings/Results: The results of this research indicate that income and expenses must be corrected. The results of the fiscal reconciliation caused operating profit to decrease to (Rp 195.368.629) or experience a loss because there was a positive fiscal correction of Rp. 507.193.723 and a negative fiscal correction of Rp 1.121.201.671. The income tax owed by PDAM Ngawi Regency in 2021 is included in nil because it experienced a fiscal loss of Rp 195.368.629.396, which will be compensated in the following year. Conclusion: Fiscal reconciliation of commercial financial statements shows that differences in accounting treatment and tax provisions cause compensable fiscal losses, so it is important to adjust financial statements following tax regulations to maintain compliance and accuracy in calculating taxes payable. Research limitation/implications: Inconsistencies in accounting treatment may lead to errors in calculating taxes payable, potentially resulting in sanctions or fiscal losses.