Fiscal Government Research Articles

Explaining County Government Fiscal Transparency in an Age of e-Government

This research seeks to explain the fiscal transparency practices of individual U.S. counties by examining the extent of information shared with constituents via county government Web sites. This study evaluates a random sample of 400 U.S. counties, where 19 percent of those represented have populations of 100,000 or more residents, matching the same ratio of counties with populations of 100,000 or more residents nationally. We create a four-level categorical dependent variable measuring fiscal transparency and use a generalized ordered logit analysis with eight independent variables to explain the extent of fiscal transparency among the sample.

A sheep in wolf’s clothing: Can a central bank appear tougher than it is?

Central banks (CBs) in Europe and the US have been providing virtually unlimited amounts of liquidity to banks for quite some time now. This may lead banks to expect that these CBs will be lenient in the future. Will this expectation be justified? I present a model in which a commercial bank, subject to idiosyncratic liquidity shocks, faces uncertainty about whether the CB is tough (Hawk) or lenient (Dove). Specifically, the CB knows its nature, but the bank does not. When uncertainty is high, the CB can use this to its advantage and try to build a reputation for toughness. In response, the bank chooses higher liquidity reserves in equilibrium. Furthermore, increasing bank capital and penalty rates make it easier to build a reputation, while bailouts by the fiscal government make it more difficult.

Effectiveness of Sovereign Oil Funds as Instruments of Fiscal Stability: A Panel Data Analysis of the Influence of Sovereign Oil Funds on Government Spending and Fiscal Balance

To enrich the debate about the fiscal effectiveness of sovereign wealth funds, this paper explores the effect of sovereign wealth funds (more precisely sovereign oil funds, SOFs) on the government spending in real term and as a share of GDP. First, we evaluate the relationship between the balance of the funds and the real government spending. We also assess how the improvement of the characteristics of the funds may change the real public spending. Then, we introduce an econometric model that explains government spending as a share of GDP with a set of economic and demographic control variables. Thanks to this model, we compare the government spending of countries that have established funds to countries without funds and we also evaluate the change in government spending before and after the establishment of funds. Furthermore, we determine whether a larger balance of funds is better able to perform its stabilizing function. Finally, we extend the exploration to the influence of sovereign funds on the fiscal balance.

Handbook of Local Government Fiscal Health, edited by HelisseLevine, Jonathan B.Justice, and Eric A.Scorsone.Burlington, MA: Jones & Bartlett Learning.

Handbook of Local Government Fiscal Health, edited by HelisseLevine, Jonathan B.Justice, and Eric A.Scorsone.Burlington, MA: Jones & Bartlett Learning.

Aid and Government Fiscal Behavior: Assessing Recent Evidence

This paper reviews evidence published in the last 10 years that has added to our understanding of the effects of aid on government spending and tax effort in recipient countries, with a discussion of when (general) budget support is a fiscally efficient aid modality. Three generalizations are permitted by the evidence: aid finances government spending; the extent to which aid is fungible is over-stated and even where it is fungible this does not appear to make the aid less effective; and there is no systematic effect of aid on tax effort. Beyond these conclusions effects are country-specific.

INTEGRATED MANAGEMENT OF MIGRATION, EMPLOYMENT, FISCAL POLICY AND PUBLIC DEBT

The main idea of the paper states that national migration indicators are closely related with employment opportunities in that country. In addition, the management quality of migration and employment processes is an indicator of the national socio-economic policy competency, while management of these processes is the main purpose of intelligent adjustment of the national fiscal policy and government debt management. The author of the paper selected the formation of the system of quantitative indicators as the main objective of the paper. The system should allow employing government debt possibilities for the selection of proper fiscal policy in order to prevent the transformation of unemployment into the key reason of uncontrolled national inflation. This would be done by revealing the possibilities of fiscal policy to impact on the level and structure of unemployment. Recent globalisation processes and integration possibilities bring a lot of uncertainty to predetermined viability of theoretical assumptions as well as the adequacy of the applied quantitative methods. The paper uses the possibilities of stochastic optimisation and stochastically informed expertise pursuing the possibilities of integrated management of employment, migration processes, fiscal policy and government debt provisions.

Fiscal centralization, government control and corporate tax burden: Evidence from China

This paper examines the relationship between government control and the tax burden of firms in China. We develop a new corporate tax burden measurement taking turnover taxes into account, because in China turnover taxes actually constitute the main component of tax burden. We find that the tax burden of state-owned enterprises (SOEs) is lower than non-SOEs, indicating that non-SOEs are facing tax discrimination. Among SOEs, the tax burden of local SOEs is higher than that of central SOEs, and the lower the local governments’ level, the higher the tax burden of SOEs under their control. We interpret these findings as the result of local governments’ tax competition and tax grabbing behaviors under China’s current highly centralized fiscal system. In addition, we find that our results are mainly caused by firms’ differences in tax refunds and the Value-Added Tax (VAT) burden.

Michigan Local Government Fiscal Health Continues Gradual Improvement, but Smallest Jurisdictions Lagging

This report presents Michigan local government leaders' assessments of their jurisdictions' fiscal conditions in 2013 and the actions they are taking in response to ongoing and widespread fiscal challenges. The findings are based on responses from five statewide survey waves of the Michigan Public Policy Survey (MPPS) conducted annually each spring from 2009 through 2013.

Understanding China’s official statistics

In response to the three influential doubts about government statistics, this article expounds the differences between relevant common economic statistical indicators and the national account indicators that reflect demand structure and national income distribution structure. The comparisons include the following aspects: the differences between household consumption expenditure from household survey and from expenditure-based GDP; the differences between total retail sales of consumer goods and final consumption expenditure from expenditure-based GDP; the differences between government expenditure from government fiscal statistics and government consumption expenditure from expenditure-based GDP; the differences between total investment in fixed assets from investment statistics and gross fixed capital formation from expenditure-based GDP; the differences between inventories and change in inventories from expenditure-based GDP; the differences between foreign trade balance from customs statistics and net exports of goods and services from expenditure-based GDP; and the differences between household disposable income from the household survey and from the Flow of Funds Table, etc. In addition, this article answers the questions proposed by the three doubts correspondingly.

Reassessing the All-Volunteer Force

When America ended the military draft in 1973 and transitioned to the All-Volunteer Force (AVF), the success of this ambitious enterprise was not guaranteed. Yet by the early 1990s, decisive victor...

Do habits generate endogenous fluctuations in a growing economy?

This article examines endogenous fluctuations under habit persistence in preferences using an otherwise standard one-sector endogenous growth model with fiscal government policies. I show that a continuum of competitive transitional equilibrium paths exists, in conjunction with a globally unique balanced growth path, when a household's preferences are characterized by habit persistence in a growing competitive economy with exogenous fiscal policies, namely, income taxes and productive public spending. Indeterminacy also emerges in the socially efficient second-best allocation even when the government intends to internalize habit externalities, including jealousy and admiration, by introducing optimal time-variant income taxes and public capital services. Therefore, in the presence of multiple competitive equilibria and socially efficient allocations and in the absence of continuous exogenous stochastic shocks, self-fulfilling beliefs drive endogenous business cycles in these growing economies.

Michigan's Local Leaders are Divided Over the State's Emergency Manager Law

This report presents the opinions of Michigan’s local government leaders regarding the state’s emergency manager law, officially called the Local Government and School District Fiscal Accountability Act (Public Act 4 of 2011). This law provides for the appointment of emergency managers to oversee local governments and school districts in fiscal distress. The findings in this report are based on statewide surveys of local government leaders in the Spring 2012 wave of the Michigan Public Policy Survey (MPPS).

Russia’s Financial System Development: How to Increase Innovative Potential of Economy (Value-Based Management, Public Finance)

This paper contains the analysis of Russian public finance system and the proposals of its improvement in order to increase innovative potential of Russian economy. The paper is based on the thorough analysis and international comparisons of Russia’s budget system key parameters – fiscal burden, tax system, government finance, government investment & debt, sovereign wealth funds, etc. There is also a complex review of Russia’s innovation sphere and the government role in its financing and development.

Preferred Leadership Styles, Culture, and Government Fiscal Transparency: An International Analysis

Evidence provided by the GLOBE study (2004) has shown that different cultures have definite preferences for different leadership styles. This study examines whether the cultural preference for specific leadership styles has implications for the development of the rule of law and for transparency in government budgetary reporting. Our results show that, while the Performance-Oriented leadership style is positively related to the rule of law, the Self/Group-Protective was positively associated with greater budget transparency. No consistent relationships were found for the Team-Oriented and Participative leadership styles. The most surprising and unexpected findings were that Autonomous leadership had a negative relationship with economic development (measured by GNP per capita), while Humane leadership had a strong positive relationship. One major implication of this study is that the movement towards both greater rule of law and greater transparency in government budgeting may be facilitated by changes in cultural preferences for certain leadership styles.

The Political Structures and Subnational Government's Fiscal Behavior in Malaysia

This paper examines the relationship between the political characteristics of the Malaysian government and the state government's fiscal behavior. In particular, we seek to analyze whether the incentives for the state governments to observe a prudent spending behavior have not been undermined by the fact that they have been able to influence relevant central government decisions regarding their finance. Our estimations results show that states that are overrepresented at the executive level tend to have higher spending and deficits. However, we don’t find any correlation between overrepresentation at the Parliament and states governments’ fiscal outcomes. This can be explained by the fact that in Malaysia as is frequently the case in developing nations, the legislature is peripheral to the executive in terms of decision making power. The results also show that ideological belonging does not have any impact on the state governments’ level of expenditures and deficits. We do not find any significant correlation between the level of support obtained by the ruling party in state elections and the level of the state governments’ expenditures and deficits.

Government Fiscal Policies and Redistribution in Asian Countries

This paper assesses the impact of government fiscal policies on income inequality in Asia. It discusses the role and effectiveness of redistributive fiscal policies and quantifies the effects of taxation and government expenditure on income distributions. Panel estimation for 150 countries with data between 1970 and 2009 confirms international empirical findings for Asia. Tax systems tend to be progressive but government expenditures are a more effective tool for redistributing income. Moreover, the results suggest some distinctive differential distributive effect for government expenditure on social protection in Asia. Social protection spending appears to increase income inequality, whereas it reduces it in the rest of the world. Also, adversely affecting the distribution of income in Asia is government expenditure on housing. Some options for improving the effectiveness of fiscal policies in Asia are discussed.

Public–Private Partnershipping as a Tool of Government: Exploring its Determinants Across German States

Despite considerable public and scholarly interest in public–private partnerships (PPPs) as a tool of government in Germany, there is no quantitative empirical study exploring the motivations behind policymakers' decisions to (not) use this type of privatisation policy. This article contributes to filling this gap by investigating the extent and determinants of the PPP activities of the 16 German states' governments over the period 2002–09. For that purpose, a PPP Activity Index is constructed which not only includes official PPP project figures but also state governments' programmatic, institutional, and advisory activities regarding PPP. Using this index, we statistically analyse whether fiscal stress, government partisanship, and other factors can help to explain the considerable differences between Länder governments' PPP activities. Among other things, it turns out that partisanship only matters if Socialists are part of a coalition government, and that fiscal transfers have a negative impact on a state's PPP activity level.

Research on the Relationship of Government Fiscal Revenue and Social Security Expenditure

The rapid growth of China’s economy since reformation has attracted worldwide attention, among those various types of reformation, the measure of central government’s delegation of its financial power to local government is considered as one of the important factors that contribute to the astonishing economic growth. However, this measure also caused competition among regions as well as differences among each region in economic scale. In China with a ageing population structure, social security expenditure is always an important item among its local financial expenditures, and the burden of local finance. This article mainly researches whether various fund expenditures in security system are affected by the differences of development level and economic scale among each province, city and area in China. It summarized the development history of China’s security system, analyzed its problems existed, and summed up the relationship between social security system and government fiscal revenue.

The Government Spending Multiplier and Fiscal Financing: Insights from Japan

All fiscal stimulus measures must ultimately be financed, and thus their effects critically depend on the expectations of how they are to be financed. This paper examines the importance of tax rules in determining the size of the government spending multiplier by estimating and simulating a New Keynesian dynamic stochastic general equilibrium model of the Japanese economy. This paper shows that the debt-stabilizing tax policies employed in Japan during the 1980s and 1990s played a role in making the short-run multipliers large. Provided that monetary policy is accommodative, fiscal stimulus becomes more effective if it is initially financed by debt and if that debt is repaid largely through a gradual increase in capital tax. Capital taxation has the smallest dampening effect on labor input, whereas an increase in labor input is the key factor contributing to the effectiveness of stimulus. Because the prospect of future taxation considerably affects the size of the multiplier, fiscal stimulus plans should be announced alongside financing schemes.

ADVANCED SIMULATION CAPABILITY FOR ENVIRONMENTAL MANAGEMENT (ASCEM): AN OVERVIEW OF INITIAL RESULTS

ADVANCED SIMULATION CAPABILITY FOR ENVIRONMENTAL MANAGEMENT (ASCEM): AN OVERVIEW OF INITIAL RESULTS Mark Williamson,* Juan Meza,† David Moulton,‡ Ian Gorton,§ Mark Freshley,§ Paul Dixon,‡ Roger Seitz,¶ Carl Steefel,† Stefan Finsterle,† Susan Hubbard,† Ming Zhu,* Kurt Gerdes,* Russ Patterson,# and Yvette T. Collazo* *U.S. Department of Energy, Office of Environmental Management, Washington, DC, USA †Lawrence Berkeley National Laboratory, Berkeley, CA, USA ‡Los Alamos National Laboratory, Los Alamos, NM, USA §Pacific Northwest National Laboratory, Richland, WA, USA ¶Savannah River National Laboratory, Aiken, SC, USA #U.S. Department of Energy, Carlsbad, NM, USA The US Department Energy (DOE) Office of Environmental Management (EM) determined that uni- form application of advanced modeling in the subsurface could potentially help reduce the cost and risk associated with its environmental cleanup mission. In response to this determination, the EM Office of Technology Innovation and Development (OTID), Groundwater and Soil Remediation (GWS Simulation; Model; Groundwater; ASCEM BACKGROUND: INTRODUCTION TO EM NEEDS Fifty years of nuclear weapons production and government-sponsored nuclear energy research in the US during the Cold War generated large amounts of radioactive wastes, spent fuel, excess plutonium and uranium, thousands of contaminated facilities, and contaminated groundwater and soil. During most of that half century, the nation did not have the environmental regulatory structure or nu- clear waste remediation technologies that exist to- day. The result was a legacy of nuclear waste that was stored and disposed of in ways now considered unacceptable (11). At the end of US Government Fiscal Year 2010 (FY10), EM had 18 funded sites. Estimates report these sites to contain 40 million m 3 of contami- nated soil and 6.4 trillion L of contaminated groundwater (7). Current groundwater and soil re- mediation challenges that will continue to be ad- dressed in the next decade include cost-effective characterization, remediation, and monitoring of contaminants in the vadose zone and groundwater.