Fiscal Policy Management Research Articles

Fiscal Policy and Economic Stability: A Comprehensive Analysis

This piece outlines fiscal policy and how it helps in stabilizing the economy. It starts with explaining fiscal policy and emphasizing its role as an effective tool for economic management. Tax policies, government spending, and budget deficits/surpluses which make up fiscal policy are discussed in details. The article continues by discussing the influence of fiscal policy on the economy's stability, considering its ability to boost growth, curb inflation, and reduce unemployment. While the management of fiscal policy comprises of the challenges such as political concerns and coordination with monetary policy, is also examined. Case studies and examples demonstrate success and failure of those fiscal policy implementation, which have become an invaluable lesson for policy makers. The article concludes with a look into the future trends and some suggestions on sustainable fiscal policy procedures.

Fiscal policy and inclusive growth in Nigeria

This study investigated the effect of fiscal policy on inclusive growth in Nigeria from 1985-2022. Secondary data on the human development index, the ratio of total tax revenue to GDP, total government expenditure, inequality, and government expenditure on infrastructure and education were sourced from the Central Bank of Nigeria (CBN) and the United Nations Development Programme (UNDP). The Autoregressive Distributed Lag (ARDL) technique was employed as the main analytical tool. The ARDL Bounds test showed that in the long run, government expenditure on infrastructure, and education, has a positive and insignificant relationship with inclusive growth (human development index) in Nigeria. Also, total government expenditure and the ratio of total tax revenue to GDP have a negative and insignificant relationship with inclusive growth (human development index) in Nigeria. Interestingly, inequality has a negative and significant relationship with inclusive growth (human development index) in Nigeria. In the short run, the ratio of total tax revenue to GDP and government expenditure on infrastructure has a negative and significant relationship with inclusive growth (human development index) in Nigeria. At the same time, government expenditure on education, total government expenditure, and inequality has a positive and significant relationship with inclusive growth (human development index) in Nigeria. These results highlight the vital role that responsible fiscal policy management plays in promoting sustainable development and inclusive growth. The study recommended a need to augment tax revenue, enhance capital investment, and address income inequality to bolster inclusive growth efforts in the country further.

The effects of fiscal policy management, candidacy of previous mayors, and illiteracy on mayoral reelection in Brazil

AbstractThis study investigates factors influencing the reelection prospects of Brazilian mayors. Analyzing a comprehensive data set spanning 5114 municipalities across four elections reveals that increases in investment and current expenditures before elections pay off at the polls. Moreover, higher average investment expenditures throughout the term enhance reelection chances. The results also indicate that when former term‐limited mayors run against the incumbent, reelection probability diminishes, particularly with higher average investment by the previous mayor. Finally, the level of literacy shapes voter attitudes towards opportunistic fiscal strategies: voters with limited literacy are inclined to reward increases in current expenditures, whereas more educated populations prefer increasing investment.

HUMAN RESOURCES MANAGEMENT EFFICIENCY ISSUES RELATED TO ARMENIA’S TAXATION

The results of effective management of human resources are most clearly manifested in state agencies. In this regard, the state tax service is not considered an exception, where the effectiveness of tax administration and fiscal policy management is largely determined by the available quality of used labor resources. The article presents recommendations for improving the quality of labor resources in tax services, based on the analysis of international experience. Special emphasis is placed on systematic measures to ensure the quality of labor resources, such as motivation, targeted trainings, professional advancement paths.

The Fiscal Reaction Function and the Transmission Mechanism for Pakistan

Modern macroeconomics literature emphasises both the short run and long run objectives of fiscal policy [Romer (2006)]. In the short run it can be used to counter output cyclicality and/or stabilise volatility in macro variables, which is descriptively same as of effects of the short run monetary policy. Further for the long-run, fiscal policy can also affect both the demand and supply side of the economy. But in most traditional analyses it is assumed that fiscal policy would adjust to ensure the intertemporal budget constraint to be satisfied, while monetary policy is free to adjust its instruments [‘Ricardian Regime’ by Sargent (1982)] such as stock of money supply or the nominal interest rate [Walsh (2003)]. The debt financing methods, expenditure and tax powers of fiscal authorities i.e. the fiscal policy has also been seen as to affect both the supply and demand side of the economy. As noted by Baxter and King (1993), the initial Real Business Cycle models had only the supply side effects of the fiscal policy, where these were transmitted through the wealth effect and labourleisure choices of the household. Recently also New-Keynesian type models with micro-foundations and sticky prices argue that still through the supply side fiscal policy management could be accorded for stabilisation [Linnemann and Schabert (2003)]. The demand side effects of the fiscal policy could also be found only with more imperfections such as ‘Rule of Thumb’ consumers or those with liquidity constraints, which lead to exclusion of Ricardian equivalence [Gali, et al. (2005)]. But all that depends on the structure of the economy, as Blanchard and Perotti (2002) stated:

Public Spending and Sustainable Human Development in Cameroon: Does corruption matter?

This study analyzes the effect of public spending on Human capital on human development in Cameroon by controlling the impact of corruption. After using quantitative methods, the ARDL model was applied with the bounds testing approach with time series data from 2000 to 2021. The results indicated that public spending on education and health positively impacts the change in the human development index. Similarly, economic growth (GDP) positively affects the variation of the human development index. Meanwhile, corruption and foreign direct investment (FDI) negatively correlate with the human development index. However, these results are only valid in the short term. In the long term, there is no relationship between the variables. The government should increase the expenditure budget and expand the target sector to reach the industry needed for human development. An improvement could follow this implementation in transparency in fiscal policy management, which can help reduce the corruption perception index. One of the limitations of this research is the use of a short observation period due to data availability. Therefore, the relationship between public expenditure, corruption, and human development in the CEMAC zone is another critical issue that could be investigated.

Income inequality in developing countries: fiscal policy’s role amid uncertainty

ABSTRACT This study investigates the impact of uncertainty on income inequality in developing countries. Unlike prior studies, we analyse the role that the fiscal policy could play in the relationship. Using a sample of 66 developing countries over the period 2000–2020, we find at several levels of robustness that, uncertainty increases income inequality in developing countries, especially those with fiscal deficits and less fiscally disciplined. Additionally, we find that fiscal surpluses mitigate the negative effects of uncertainty on wealth distribution which in turn reduces income inequality. This result reveals the socio-economic stabilizing role that fiscal policy management could play during periods of uncertainty. Fiscal policy can maintain and enhance economic stability when countries face certain uncertainty.

The Effectiveness of Governance Through Fiscal Policy Management in South Africa

Fiscal Policy is an important instrument for managerial decision-making. Many countries in Africa have adopted this policy to ignite socio-economic development. In South Africa (SA), several fiscal policy strategies have been adopted and implemented since the country's transition to democracy in 1994 with the aim of stimulating economic growth. Fiscal Policy is the utmost significant tool of economic management that is used by government to achieve the growth of economic activities. It is a vital measure of economic policy that achieves the foremost objective of managing economic growth, accomplishing complete employment, preserving the stability of price, settlement of economic balance and attaining societal integrity. The objective of this paper revealed a positive relationship between fiscal policy and managerial decision making in South Africa. In addition, the findings suggests that government spending has proven unsustainable, and continued spending on some of these policies may exacerbate the country's economic situation, given the fact that its expenditure is largely dependent on income tax. Based on the findings, this paper recommends that, for the SA economy to perform better, resources should be diverted from government consumption (thereby reducing funding for some of the current fiscal policies) to investment spending (e.g., job creation, poverty alleviation and promotion of long-term economic growth through infrastructure development).

Procyclicality of fiscal policy in oil-rich countries: Roles of resource funds and institutional quality

Fiscal policy management in natural resource-rich countries, particularly the ones struggling with inadequate institutional quality, faces significant challenges because of the dependence of government expenditures on highly volatile revenues of their natural resources. To resolve this issue, most of them have set up natural resource funds; however, the effectiveness of these funds is under debate. Large government expenditures financed by transfers from these funds are not highly likely sustainable and may entail long-term severe economic risks. That brings the necessity of detailed analyses of resource-rich countries' fiscal policy management by integrating the effects of the natural resource funds. This study puts a step forward in this direction; it takes 32 oil-rich countries for the period 1984–2015. Then it analyzes their fiscal policies regarding their government expenditures by unravelling the effects of the presence of the natural resource funds and the adequacy levels of their institutional qualities, categorized with the clustering algorithms. It uses dynamic panel data analysis and elaborates on the proper estimation techniques by considering cross-sectional dependence among data of these countries, heterogeneity of slope coefficients and endogeneity issues. The study reveals that even after controlling the effects of the volatility of the oil price changes and the share of oil rents in total income, resource-rich countries' fiscal policy goes with the flow. In favourable economic conditions, government expenditures are soaring, but when economic downturns happen, their growth levels also turn down. That means high fiscal procyclicality even in the presence of natural resource funds. As expected, the presence of these funds is not sufficient. For the desired countercyclical policy, adequately high enough institutional quality is needed to manage those funds and fiscal policy effectively.

Efekti fiskalne politike na Republiku Srbiju i zemlje u okruženju

Fiscal policy is a powerful instrument for stabilizing the national economy, and with its help the level and structure of taxes, expenditures and debt management are controlled. Fiscal policy management affects aggregate demand, the distribution of wealth, and the economy's ability to produce goods and services. It represents a tool of macroeconomic policy, and in this paper the authors will particularly deal with the impact of fiscal policy on certain macroeconomic components: public debt, balance of payments, but also on the attraction of foreign direct investments and competitiveness. States must conduct a responsible fiscal policy in accordance with their capabilities in order to reduce poverty and social inequalities, and at the same time ensure economic growth. Fiscal sustainability is a complex issue, especially in periods of crisis, and therefore it is necessary to make decisions that will have positive effects on economic development in the long term.

To Identify the Challenges of Fiscal Policy for Construction Industry in Pakistan

The entire influence of a country's budget outcome on economic activity is referred to as fiscal policy. Fiscal policy has its own share of benefits & challenges in particular groups. Therefore, the aim of this study is to identify the benefits & challenges of Fiscal Policy for Construction industry. A detailed literature review has been conducted to identify the possible benefits and key challenges to better fiscal policy. In later stage, a set of questionnaire was prepared using the identified factors. The data was collected from construction industry professionals with experience on fiscal policy management. The data was analysed by aggregated average mean using SPSS. The factor ranks were made on the higher values of aggregated mean value. The study concludes that the main hurdles to better fiscal policy are import/export restrictions, delays in land/plot permits/licenses, and currency fluctuations, as well as government subsidies on construction materials. Similarly, the top benefits for better fiscal policy in the construction industry include meaningful salaries/wages and employment for daily wage earners. The study recommended that, Policymakers must be urged to adopt suitable fiscal policies that address these challenges in order to evolve and improve the construction sector.

Dinamika Perekonomian Indonesia Sisi Pengeluaran: Sebelum dan Setelah Adanya Covid-19

The management of fiscal policy in Indonesia will have a positive impact on the market and can provide guarantees for the Indonesian economy. This study aims to determine the effect of PMTB, Household Consumption Expenditure, Government Consumption Expenditure, Indirect Expenditure and Direct Expenditure on GRDP seen from before and before the covid-19 pandemic. This study uses annual data, namely 2019 before the pandemic and 2020 before the pandemic from each province in Indonesia. The method used in this research is the dummy panel method which is processed through a eviews 10 programs for the period 2019 and 2020, the data used is sourced from the Central Statistics Agency and the Ministry of Finance's DJPK from 34 provinces in Indonesia. Based on the results of the study, it can be said that either partially PMTB, household consumption expenditure, government consumption expenditure, indirect expenditure and direct expenditure have a significant effect on GRDP and there is no significant effect between GRDP before the covid-19 pandemic (2019) and after the COVID-19 pandemic. the COVID-19 (2020) pandemic. Keywords: covid-19, economy, expenditure

The Relative Effectiveness of Monetary and Fiscal Policies:Evidence from Jordan

The study aims at investigating the relative effectiveness of monetary and fiscal policies on economic growth of Jordan during the period 1977- 2019 using Autoregressive Distributed Lag (ARDL) methodology. The variables of the study were integrated of different orders as indicated by Augmented Dickey-Fuller (ADF) unit root test. Bounds cointegration test revealed that there is a cointegrated long-run relationship between the study variables. The study results showed that there is a statistically significant positive long-run relationship between real GDP and each of broad money supply and total government expenditures. Moreover, the long-run coefficient of money supply was much greater than that of government expenditures, implying that the effectiveness of monetary policy is higher than that of fiscal policy in affecting the economic performance, and both policies can be implemented to stimulate the economic growth in Jordan. Therefore, the study recommends the Jordanian government to improve the management of fiscal policy by controlling its current expenditures, increasing the productive investments, as well as applying a comprehensive tax reform in order to strengthen the role of fiscal policy in boosting the economic growth.

Konut Finansmanı Kredilerinde Erken Ödeme Müessesesinin Sonuçlarına Yönelik Bir Değerlendirme (A Comparative Review of the Early Payment Results in Housing Loans)

The aim of the study is to reveal the function of the early payment option after the end of the downward trend in housing loans rates in Turkey. The compensation application limits the expected benefits, and this study wants to analyze and evaluate this situation comparatively on a real loan example. In this study, it compares with a real housing and consumer loan example and deals with this issue. The most rational way for customers is not to pay the housing loan early. Rational customers will prefer to direct their existing investable funds to time deposits with rising interest rates. This gives them the opportunity to get rid of some of their loan debt with the deposit interest income they will provide within the payment plan. This means that existing loans become more advantageous for customers. However, considering that this advantage will indirectly create a burden on the general economy, it is essential that the relevant market makers and oversight boards make the necessary regulations regarding this issue. Another important point is that the regulation to be made in this regard will theoretically increase the demand for the Turkish lira and will be supportive in terms of monetary and fiscal policy management.

Managing the Inflation Problem in Nigeria using the Fisco-Monetary Approach

This study examined empirically the impact of monetary and fiscal policy management on the problem of inflation in Nigeria. Monthly data spanning from January 2010 to October 2016 on inflation rate, interest rate, exchange rate, narrow money, broad money, government capital expenditure and government recurrent expenditure were obtained from Central Bank of Nigeria (CBN) statistical bulletin and fitted into the regression model. Autoregressive Distributed Lag (ARDL) was employed after ascertaining the stationarity properties of the series through the Augmented Dickey-Fuller (ADF) test. The results showed that broad money supply (M2) and Capital Expenditure (CE) were significant and are positively related (short and long run) to inflation in Nigeria. Exchange rate was significant and positively related to inflation in the long run. The study also revealed that Nigerian inflationary situation is driven by monetary and fiscal policies in the long run. Narrow money has no significant impact on inflation problem both in the short and long run in Nigeria. The study concluded that monetary and fiscal policies have positive impact on inflation in Nigeria and recommended that monetary and fiscal policies should be harnessed, coordinated and sustained with the help of Central Bank of Nigeria in order to combat the problem of inflation in Nigeria. (JEL E62, E51, E31)

Contemporary perspectives on fiscal decentralisation and new local government in South Africa

There are shared thoughts among scholars that fiscal decentralisation is a solution to the problems of poor public services in the local government. Fiscal decentralisation is the dispersal of financial responsibility to lower levels of government or other spheres of government. This study highlights various discourses on local self-government, especially fiscal decentralisation processes, local revenues, and the New Local Government philosophy of local government reform in South Africa. This research interrogates the importance of fiscal decentralisation as a tool to facilitate greater effectiveness and efficiency in local government. A qualitative research approach was used to obtain information. Through the review of the literature and selected official government reports, the study found that development in local government can be achieved through the effective decentralisation of responsibilities, fiscal policy management, fiscal decision-making authority and sufficient resources, including revenue collection authority to local authoritiesFiscal decentralisation requires a concerted effort in capacity-building and institutional fiscal reform and should, therefore, be associated with the strengthening of local authorities. Decentralisation can occur at the level of fiscal expenditures and revenues creation or sourcing. This paper emphasises the importance of fiscal decentralization and the New Local Government philosophy of local government reform. Keywords: Fiscal Decentralisation, Local Revenues, New Local Government, Finances

The Importance of a Medium-Term Budgetary Framework in Enhancing the Sustainability of Public Finances

Globalization has changed traditional systems to scientific systems rapidly. This reform took place every organizational process. Fiscal reforms are the major reforms in the organization. The objectives of fiscal reform is to enhance the quality of fiscal governance and public finance. The fiscal reform also consolidate superior budgetary resources through better disciplinary fiscal policies. These disciplined fiscal policies can be followed by the organizational and legislative measurements. It will leads to the introduction and establishment of new and independent fiscal rules. Now fiscal strategies moving towards the multi-annual budget system. The implementation of multi-annual budget system introduced the medium term budgetary system. The basic aim of this study is to introducing the importance of implementation of medium term budget system and the role of this budget system in public organizations. Fiscal management policies and tools plays important role in the sustainability of public finance in nations.

Финансовая политика Русского государства в 1584–1590 гг.

This article examines fiscal management policies of the Muscovite state following the death of Ivan the Terrible. The author focuses on the adjustments to the system of immunities made during the period 1584–1590. They were intended to ensure the functioning of a society falling into crisis by regulating the system of commodity exchange and tax exemptions.

Towards a More Comprehensive Fiscal Policy Management in Ghana

Ghana’s thriving democracy has created space for the country to implement various fiscal reforms with the aim of ensuring a sustainable macroeconomic environment over the past three decades. Despite these reforms, the country has experienced recurrent fiscal slippages since 1992 usually occurring in election years. The paper investigates four sources of budget rigidities and fragmentation which fuel expenditure overruns in Ghana; namely the type of fiscal rules governing the budget process, the poor administration of internally generated funds, the increasing share of earmarked budget revenue, and the over dependence of state owned enterprises on central government budget. The main finding of the paper is that budget rigidities explain the country’s inability to successfully prevent budget overruns during elections. The paper concludes that Ghana could be ranked very high for undertaking fiscal reforms but equally scores very low for functionality of the reforms overtime. Many of the reforms are abandoned after they gain legitimacy from development partners. Ghana’s piece meal approach to the implementation of fiscal reforms and the lack of strong oversight of fiscal policies have also contributed to the inability of the country to put in place appropriate fiscal management systems to solve its macroeconomic challenges. It is recommended that Ghana creates a comprehensive fiscal reform package within which it will address the inherent fiscal rigidities in the budget cycle.

Chile Fiscal Policy Management

A budget surplus arises in a country when the total revenue earnings surpass expenditures in a particular financial year. Having a budget surplus is very important in the sense that it brings about a decrease in the net public debt, while the public debt is increased in the event of a budget deficit. Both budget deficits and budget surpluses also exert indirect influences on taxpayers. Normally, it is not essential on the part of the government to maintain a budget surplus, though it needs to be very careful when running a budget deficit to have the proper buffer.