Fiscal Innovation Research Articles

Government Commitment to Responsive Budgeting to Improve Gender Equality in City Government

This study aims to analyse the government's commitment to gender-responsive budgeting to improve gender equality in three cities governments. The method used is qualitative with a literature review approach and secondary data. Data were collected from various sources, including scientific journals, government reports, and policy documents related to gender-responsive budgeting. The results indicate that despite supporting local regulations, the implementation of gender-responsive budgeting varies across the three cities. In two cities, regulations exist, but the implementation is suboptimal; the allocated budget does not fully reflect a commitment to gender equality, and obstacles remain in transforming this commitment into local fiscal innovation. In the third city, the government's commitment is evident through various programs and training to enhance understanding and skills in preparing gender-responsive budgets. However, challenges like the lack of gender-disaggregated data and low political support persist. This research implies that improving gender equality requires greater commitment and understanding from all parties, as well as stronger gender-responsive budgeting policies and mechanisms. It also highlights the importance of cooperation between the government, civil society, and international institutions to overcome existing obstacles This research is novel in its comparative analysis of gender-responsive budgeting implementation across three cities and the identification of strategies to enhance its effectiveness and efficiency at the city level in Indonesia. It aims to significantly contribute to developing more inclusive and gender-equitable budgeting policies in the country.

LANDSCAPE: THE IMPETUS NEEDED FOR A FAIRER TAX SYSTEM AND FAIRER USE OF TAXES

Innovation, new technologies and techniques have transformed the economy and especially the tax landscape. The rapid process of e–fiscalization in Albania has influenced the improvement of the performance of the tax administration and institutions, the business climate and trust. The paper aims to explore the impact of e–fiscalization toward a fairer tax system, illustrating with a case study from Albania. The study provides an insight into the multi–dimensional impact of innovation and e–fiscalization on the economy, with a focus on the financial ecosystem, organizations and key actors in society. The qualitative investigation used supports the influence of fiscal innovation and new practices for increasing transparency and restoring trust, creating a new institutional and governance potential for both fairer taxation and fairer use of taxes.

TAX POLICY OR STOCHASTIC PERTURBATIONS

Introduction. The chaotic attempts to reform the domestic taxation system have been called tax policy for some time. It seems that it was started by an attempt to join such a weighty Greek term. As a result, there was an inconsistency in the terminology, which to some extent veils the problems of taxation, so its deductive understanding has both scientific and practical significance, and is therefore relevant. Methods. The study of the outlined problem was carried out using the following methods: deduction, that is, a critical understanding of a number of publications by scientists who considered individual tax innovations under the aspect of fiscal policy and the synthesis of such information in order to substantiate its own understanding. The results. It is emphasized that stochastic and chaotic perturbations in taxation do not correspond to the essence of the definition of "tax policy". Argumentation that serves as confirmation of this thesis is given on specific examples. It is noted that the lack of theoretical justification for changes in tax policy, even with their partial rationality, turns into an unpredictable leveling of this positive. First of all, as a result of ignoring the limits of accounting, defined by the classic Y.-F. Sherom, since there is no proper relationship between this subject and tax policy, and fiscal innovations are not accompanied by synchronous accounting methodological support, so it has to be formed by trial and error. As a result, methodologically unmotivated sub-accounts are introduced, the use of which even creates additional conditions for falsification of monetary transactions for the payment of value added tax. The need to harmonize tax policy with classical taxation rules is emphasized. It is indicated that this is possible when the problems of tax policy will be in the center of attention of scientists. Discussion. In this area, one should look for promising ways to solve the problems of tax policy. And taking into account its complexity, it is worth listening first of all to the opinions of practicing accountants, and not to anonymous "inventors" of all kinds of complications, which are introduced without taking into account the laboriousness of accounting support for taxation and control over its reliability, and therefore do not lead to effective consequences.

Fiscal Decentralisation and Local Government Reform: Adaptation in Ukraine Experience of Poland and Lithuania

An effective local government system is one of the basic platforms for the functioning of the country in crisis conditions and the key to a successful post-war recovery of the economy at all levels. Studying the experience of European countries, primarily neighboring countries, greatly facilitates the construction of an optimal model of such a model. The article analyzes the fiscal innovations of Poland in detail, taking into account the identity of the administrative-territorial system and the identity of the formation of local self-government bodies. The indisputable advantage of the introduction of innovative fiscal regimes (Estonian СIT) for the economy of Poland has been established. The conclusions are convincingly illustrated by the dynamics of Poland's GDP growth and the rankings of Poland and the Baltic countries in the world rankings of tax capacity. The study of the experience of Lithuania in the field of reforming the territorial organization of power, carried out in the article, led to the ascertainment of revolutionary phenomena introduced by the neighboring country during both stages of administrative reform. Namely: the presence of a financial self-control mechanism implemented at the sub-regional level and an exceptional example of the delegation of powers from local self-government to a territorial unit managed by a civil servant (and not vice versa). Effective recommendations on borrowing Polish and Lithuanian experience and adapting it to modern conditions of Ukraine's development have been provided. It was established that dialogue with local civil society is the driving force behind the effectiveness of local self-government reform measures. This feature should be used by Ukraine during the completion of the process of reforming local self-government.

Older Workers’ Labor and the Gig-Economy: Precarization or New Opportunities?

The gig-economy is a flexible form of labor characterized by project employment on digital platforms. The purpose of the article is to analyze the essence of the gig-economy in order to assess its impact on the work of the older generation. The analytical review was made taking into account the following tasks: 1) analysis of relevant literature, 2) secondary analysis of quantitative, qualitative and statistical data, 3) assessing the impact of the gig-economy on the employment of pensioners in terms of precarization. An analysis of the literature shows that the “flexibilization” of the labor market is described in ambiguous terms: a number of authors describe the positive aspects (no set schedule, growth of individuality, eradication of bureaucratic restrictions), while others focus on the negative consequences (instability of income, lack of social guarantees, overexploitation, etc.). The author highlights a number of negative risks for the elderly gig-employed (forced self-employment, vulnerability to fraud, lack of social guarantees from the employer, etc.), but comes to the conclusion that the gig economy has a fairly positive impact on the employment of the elderly: 1) social security (basic pension income and social state protection), 2) integration into a new labor reality and opportunities to improve well-being, 3) resocialization, etc. A separate advantage of selfemployment is a fiscal innovation that is beneficial for the elderly which allows pensioners to obtain the status of self-employed without sacrificing pension indexation. The scientific novelty of the study lies in analyzing the employment of the older generation through the lens of the gig-economy and precarization.

Improving the governance and legal framework for implementing financial and fiscal innovation in a digitalized environment

This paper considers the organizational and legal support of the processes of digitalization of innovation in the financial and tax sectors. The main prerequisites were identified, and the role of financial and tax innovations in the development of the economy at the macro level was defined. Emphasis is on digital technologies as the main driving force of innovation in the financial and tax sector. The relationship between the concepts of "financial and tax innovations" and "financial engineering" has been established. The main directions of digitalization of the financial and tax sectors are identified. The digital technologies that have the greatest impact on financial and tax innovation are identified, namely: blockchain, Big Data, artificial intelligence, cloud technologies, the Internet of Things. The directions of legal regulation were substantiated and further steps to develop legal support for the digitalization of the financial sector were determined. To this end, the components of legal regulation, institutional regulation, and scientific and methodological regulation of digitalization of the financial sector are detailed. In contrast to numerous studies in the field of legal support and regulation of digitalization of the financial and tax sectors, it has been hypothesized and proved that the greatest effect is achieved with the harmonious interaction of institutional components. The system of management of financial and tax innovations in the context of digitalization has been improved. To this end, the stages of the transformation process of the financial and tax innovation management system in the context of digitalization were detailed and an algorithm for digitalization of the financial sector has been developed. The scope of practical application of the research results is the development of the financial and tax sector through the introduction of digital tools

Driving effect of fiscal policy on regional innovation efficiency

This study uses a network data envelopment analysis (DEA) approach to measure phased innovation efficiency to explore how fiscal technology innovation policy drives the development of regional innovation. A game model is constructed that includes governments, enterprises, universities, and research institutes to explain the influence mechanism. The innovation process is decomposed into the transformation stage of scientific research results and their commercial application. A Tobit model is used to explain the effect of fiscal policy on innovation efficiency. These methods led to novel conclusions: (1) the growth rate of innovation efficiency in the first stage is greater with smaller regional differences, with larger regional differences in innovation efficiency in the second stage; (2) the intensity of fiscal R&D funding in science and technology has a significant positive effect on overall innovation efficiency and phased innovation efficiency; and (3) the positive effect of fiscal R&D funding is greater on the commercial application of scientific achievements. The targeting effect of fiscal innovation policy on industry–university research (IUR) cooperation needs to be improved through resource sharing, joint participation, sharing of achievements, and risk sharing.

A behavioral approach to administrative reform: a case study of promoting proactive administration in South Korea

PurposeThe South Korean government launched the proactive administration initiative in mid-2017, which has been widely implemented throughout the public sector. Accordingly, the purpose of this paper is to review a behavioral approach to promote proactive administration in the South Korean government.Design/methodology/approachThe research questions are as follows: (1) How did the South Korean government initiate a behavioral approach to administrative reform by promoting proactive administration? (2) What systems or mechanisms has the South Korean government utilized to promote proactive administration? (3) What kind of constraints did the government face in the process of administrative reform and how did it resolve them? (4) What was the preliminary reaction to or evaluation of such reforms in public administration communities?FindingsAlthough it is still too early to evaluate the overall impact of administrative reform to promote proactive administration on civil servants’ behavior, it has nonetheless contributed greatly to the substantial change in perception that public officials in the administrative field should pursue their work as actively as they can.Originality/valueThis study is meaningful because while many countries have promoted administrative reforms such as structural reorganization, downsizing of human resources, cutback management and fiscal innovation, privatization, regulatory reform and promotion of digital government, cases of behavioral innovation, such as proactive administration, have been relatively scarce. Since a behavioral approach to administrative reform would be essential in many countries, this paper will serve as a useful reference for the consideration of their governments.

The Great Revenue Divergence

AbstractThis article describes and explains a previously overlooked empirical pattern in state revenue collection. As late as 1913, central governments in the West collected similar levels of per capita revenue as the rest of the world, despite ruling richer societies and experiencing a long history of fiscal innovation. Western revenue levels permanently diverged only in the following half-century. We identify the twentieth-century great revenue divergence by constructing a new panel data set of central government revenue with broad spatial and temporal coverage. To explain the pattern, we argue that sustainably high levels of revenue extraction require societal demand for an activist state, and a supply of effective bureaucratic institutions. Neither factor in isolation is sufficient. We formalize this insight in a game-theoretic model. The government can choose among low-effort, legibility-intensive, and crony-favoring strategies for raising revenues. Empirically, our theory accounts for low revenue intake in periods of low demand (the nineteenth-century West) or low bureaucratic capacity (twentieth-century former colonies), and for eventual revenue spikes in the West.

The Fiscal Hedging and Green Financing: Sustainability Challenges for Developing World

The global community has set intensive targets in Sustainable Development Goals (SDGs) to better people’s lives after closing the Millennium Development Goals (MDGs). It corresponds to the 2030 aspirations of the United Nations to enhance and promote the sustainable development of human society. The current paper explores the impact of fiscal hedging and R&D in energy Using a green-energy system in SDGs. To do this, we used TOPSIS and QARDL methodologies on a 21-year dataset of South and Southeast Asian economies from 2000 to 2020. The study results show that fiscal hedging contributes favourably to the environmental degradation of the underlying economy. Research and development (R&D) in renewables has contributed negatively to ecological degradation and SDGs in the economies of South & Southeast Asia. This study suggests policy guidelines for advanced and developing economies based on fiscal stability and technical innovation through R&D to meet SDG.

Economic and Monetary Integration in ECOWAS Countries: A Panel VAR Approach to Identify Macroeconomic Shocks

This paper studies the impact of output, exchange rate, price, and economic policies (fiscal and monetary) shocks to Economic Community of West African States (ECOWAS) economies over the period 1977-2019. The results of the impulse response functions obtained from the panel VAR show that monetary policy shocks stimulate economic activity, whereas fiscal shocks lead to a contraction. Moreover, these economic policy shocks lead to an increase in the price level. Finally, they have opposite effects on the real exchange rate: a monetary policy shock leads to an appreciation of national currencies against the US dollar, while a fiscal innovation leads to a depreciation of these currencies. As for exchange rate and price shocks, they create inflation and consequently a decline in economic activity. Furthermore, the forecast error variance decomposition reveals that real exchange rate shocks contribute the most to future fluctuations in macroeconomic variables in ECOWAS countries. Moreover, a comparison of the impact on the two currency areas, West African Economic and Monetary Union (WAEMU) and West African Monetary Zone (WAMZ), shows the degree of asymmetry between the two areas. The analysis shows, on the one hand, that shocks are more persistent and significant in the WAMZ and, on the other hand, that except for real exchange rate shocks, the two zones respond asymmetrically to shocks emanating from the other variables.

De-Shadowization of Tax Gaps in the System-Compositional Models of State Fiscal Policy: Comparative Analysis of EU Countries and Ukraine

The purpose of the article is to consider the empirical calculations of the level of de-shadowization of tax gaps in the system-compositional model of the fiscal policy of the state. The methodological approach to cointegration of the level of de-shadowization of tax gaps into the system-compositional model of fiscal policy is substantiated, taking into account the strategic determinants of financial and economic development of the state. The method of calculation of the integrated indicator of strategic alternatives is presented and represents the configuration of the modified system of fiscal innovations in relation to the taxation of economic entities. A methodical approach to estimating the level of de-shadowization of the tax gap on the income tax of economic entities is proposed. The level of unit testing of variables of de-shadowization of tax gaps from indicators of financial and economic development of the EU and Ukraine is analyzed. It is concluded that one of the most influential factors today is the de-shadowization of the economy. The future directions are the research of the ways to improve Ukraine’s fiscal policy.

The political economy of euro area sovereign debt restructuring

The establishment of a sovereign debt restructuring mechanism (SDRM) is one of the important issues in the academic debate on a viable constitution for the European Monetary Union (EMU). Yet the topic seems to be taboo in official reform contributions to the debate. Against this backdrop, the article identifies the SDRM interests of key players, including the European Commission, the European Parliament, the European Central Bank and national governments. The empirical section takes advantage of the recently established EMU Positions Database. The findings confirm political economy expectations: Low-debt countries support an EMU constitution that includes an insolvency procedure whereas a coalition of high-debt countries and European institutions oppose it. The analysis points towards a possible political-economic equilibrium for coping with sovereign insolvencies: an institutional set-up without an SDRM and with hidden transfers. Recent European fiscal innovations in response to the Covid-19 solvency shock confirm this prediction.

The Political Economy of Euro Area Sovereign Debt Restructuring

The establishment of a sovereign debt restructuring mechanism (SDRM) is one of the important issues in the academic debate on a viable constitution for the European Monetary Union (EMU). Yet the topic seems to be taboo in official reform contributions to the debate. Against this backdrop, the article identifies the SDRM interests of key players, including the European Commission, the European Parliament, the European Central Bank and national governments. The empirical section takes advantage of the recently established EMU Positions Database. The findings confirm political economy expectations: Low-debt countries support an EMU constitution that includes an insolvency procedure whereas a coalition of high-debt countries and European institutions oppose it. The analysis points towards a possible political-economic equilibrium for coping with sovereign insolvencies: an institutional set-up without a SDRM and with hidden transfers. Recent European fiscal innovations in response to the Covid-19 solvency shock confirm this prediction.

Fiscal innovation in nondemocratic regimes: Elites and the adoption of the prussian income taxes of the 1890s

The income tax is a central pillar of the modern fiscal state because of its revenue-raising capacity and administrative sophistication. Existing accounts point to interstate war and class conflict as key drivers of modern fiscal breakthroughs. In this article, we evaluate a third explanation for the origins of fiscal capacity that highlights the importance of intraelite competition for political and economic power in times of rapid industrialization. Modern forms of taxation generated a conflict between industry and agriculture over the distribution of the tax burden across sectors. The presence of electoral institutions that connected tax payments to voting rights created opportunities to overcome this sectoral divide and facilitated the formation of a political consensus for fiscal innovation. The political coalition supporting income tax adoption included higher-income industrial and agricultural elites who anticipated fiscal and electoral gains associated with the adoption of the new tax. Drawing on parliamentary debates in Prussia and additional district-level data, we document both the origins and electoral and economic consequences of the new income tax. We show that the adoption of a highly sophisticated income tax in 1891 shifted the tax burden from land to industry and diluted the political influence of the middle class. The findings clarify the coalitional dynamics leading to fiscal tax adoption in nondemocratic contexts.

Banking crises and the modern tax state

Abstract Have banking crises boosted path-breaking fiscal innovations? Drawing on the literature that deals with the impact of warfare on fiscal capacity, I argue that banking crises have facilitated the rise of progressive tax instruments by causing revenue needs and demands for fiscal fairness. I test this argument by means of event history analyses and new worldwide data on the introduction of the two main pillars of the modern tax state: the personal income tax (PIT) and the general sales tax (GST). Furthermore, I examine the adoption of PIT in the USA and Argentina. The findings stress the importance of financial and economic crises for fiscal institutions and call for a closer investigation of how non-bellicist shocks have shaped the modern state.

PROBLEMATIC ASPECTS OF LOCAL BUDGET DEVELOPMENT IN THE CONTEXT OF ENSURING FINANCIAL SELF-SUFFICIENCY OF TERRITORIES IN UKRAINE

The purpose of the work is to identify trends and outline the problems of local budget revenues in Ukraine in the context of financial decentralization. Emphasis is placed on the need to form a systematic vision of the role of budget policy in ensuring the development of territories, determining the basis for the formation and implementation of local budgets in the context of ensuring the self-sufficiency of territorial communities formed as a result of decentralization. The scientific article presents the results of the analysis of the development of local budgets in Ukraine in the conditions of formation and functioning of united territorial communities. Research and calculations were conducted for the periods 2008-2018 and 2013-2019, which helps to identify trends and changes in the formation of local budgets due to fiscal innovations in 2014, the analysis of own revenues and transfers per capita in the regions of Ukraine. Emphasis is placed on the budget policy of territorial development in Ukraine at the present stage to increase the role of local governments in the budget sphere, providing them with expanded functions and achieving the ability to ensure the development of the territory through efficient use of available resources and use and search for additional opportunities. The main problems that remained unresolved in the context of decentralization reforms and intensified as a result of changes were identified. There is an inflated level of redistribution of gross domestic product through the public finance sector and a low level of institutional capacity of management to effectively manage financial resources, which is characterized by the risk of declining economic development and slowing down the activity of economic entities. The high level of dependence of local budgets of territories on financial support from the state budget and the problem of inefficient distribution of powers between different levels of government are argued. Emphasis is placed on the growth of disparities in the financial capacity of territories in the context of reforms of administrative and financial decentralization. As a result of the analysis of relevant indicators, the constant change of "rules" of subventions to local budgets is justified, which negatively affects the development of territories and is accompanied by the inability of local governments to effectively strategic planning of their own development. It is established to strengthen the financial capacity of developed regions, cities of regional significance and areas around such cities, deepening the depression of rural areas far from powerful "growth points" due to decentralization changes. The role of taxes as the main sources of revenue to local budgets (personal income tax, excise tax on fuel and excise tax on the sale of excisable goods, local taxes and fees) by business entities is substantiated.

An Empirical Analysis of the Impact of Fiscal and Tax Incentives on Enterprise Technological Innovation - Taking Listed Companies on GEM as Examples

Enterprise technological innovation is the backbone of the transformation of economic development mode in China, the optimization of economic structure, and the realization of national innovative development strategy. In order to promote the transformation and upgrading of the economic structure and encourage the the development of technological innovation of enterprises, a series of fiscal and tax policies which encourage technological innovation are introduced in China. Although the fiscal and tax incentives are generally adopted by the governments of the world, the research conclusions of the academia on the implementation effect of fiscal and tax policies are not unified. For this reason, in this paper, based on the data of listed companies on the Growth Enterprise Market from 2011 to 2017, the STATA 14.0-version software is used to analyze the sample data, and the relationship between the current fiscal policies and technological innovation is explored. The study results show that the fiscal and tax incentives positively affect the technological innovation of enterprises, which provides an important theoretical basis for the government to further improve fiscal and tax policies. Finally, based on the previous research contents, the corresponding conclusions are summarized, and relevant suggestions for improving the fiscal and tax incentive policies are proposed.

Introduction: maximising revenues, minimising political costs – challenges in the history of public finance of the early modern period

Taxation is accepted as a fact of modern life, despite recurring political conflict over the nature and direction of fiscal policies. Most financiers regard obligations issued by the state as a safe investment option. Neither taxation nor state obligations were taken for granted during much of the history of public finance, however, at least not before the early 1800s. The ‘tax state’ developed in fits and starts, driven by the exigencies of warfare, which provided the main rationale for raising state income. Although wartime fiscal innovations eventually facilitated the rise of an efficient military state, the options available for implementing such improvements and preferences for specific fiscal or financial instruments varied greatly across early modern states. Focusing on the ‘long’ eighteenth century, this introduction presents a framework for assessing these differences and introduces the other articles in this special issue.

Fiscal Secession: An Analysis of Special Assessment Financing in California

Special assessments on property are a fiscal innovation employed by many local governments. Unable to raise property taxes due to limitations, localities have turned to these charges as an alternative method to fund local services. In this article, we seek to explain differential levels of special assessment financing through the analysis of property tax records of a sample of single-family homes in California. We theorize that special assessments, as opposed to other forms of taxation, will be used when residents hold anti-redistributive preferences. We show that annual assessment payments are correlated with the ethnic diversity and median family incomes of the census places within which they are located. We also show that assessments with narrow geographic ranges are levied extensively on expensive homes in poorer cities. We discuss the implications of special assessments for progressive taxation and the potential for fiscal secession within U.S. cities.