Fiscal Policy Research Articles

Regulatory Environment and Performance of Projects in State-Owned Manufacturing Firms in Kenya

Purpose: The purpose of this study was to investigate the influence of the regulatory environment on performance of projects in state-owned manufacturing firms in Kenya Methodology: The study adopted a pragmatic research philosophy and drew respondents from across twenty state owned manufacturing firms in Kenya. The study engaged respondents from these institutions by employing exploratory cross-sectional methodology and Stratified Random Sampling. Data collection involved semi-structured questionnaires which were done both physically and with the use of online forms. Descriptive analysis of data was conducted using measures of central tendencies and dispersion, development of a relational model between variables employed multiple regression analysis, while validation and reliability were performed using pilot testing, Cronbach’s alpha coefficient analysis and various methods of model diagnostics such as multicollinearity analysis, Analysis of Variance, Goodness of Fit and correlation analysis. Findings: The study established that projects in state owned manufacturing firms generally meet quality and stakeholder expectations but struggle with timelines and cost efficiency. Legal compliance requirements emerged as the strongest positive predictor of project performance while political dynamics had a significant negative impact. High prevalence of compliance requirements, particularly procurement procedures and institutional procedures contribute to accountability, but they can also lead to delays and bureaucracy. State control had relatively low influence on project performance, while Institutional structures and fiscal management framework had relatively moderate negative and positive influence on projects performance respectively. The resultant regression model explained approximately 30% of the variability in project performance Unique Contribution to Theory, Practice and Policy: Compliance requirements often ensure accountability and transparency, yet excessive bureaucracy constrains competitiveness. There is need to improve project performance in state-owned manufacturing enterprises by addressing regulatory inefficiencies, fostering institutional autonomy, mitigating political influences, simplifying regulatory procedures, automating processes, and promoting interorganizational collaboration. Additionally, aligning government programs with long-term institutional strategies and diversifying funding sources are crucial for enhancing financial resilience and ensuring project continuity in these institutions.

Japan's Economic Recovery under the Financial Crisis -- Compared with the United States

From 2008 to 2009, the United States ushered in the subprime mortgage crisis, which caused, including but not limited to, the break of bank capital chain, the rise of interest rates, the decline of people's consumption and investment ability, the collapse of the real economy, the closure of many factories, layoffs, and the straight rise of unemployment, which was a global financial crisis. At the same time, Japan is also experiencing a huge economic recession after the bursting of the economic bubble and the recovery of the economy. The subprime mortgage crisis is undoubtedly a shock to the precarious Japan. This paper will collect multiple sets of data, GDP, unemployment rate, house price and so on. It will analyze the similarities and differences between Japan's "bubble economy" and the United States' "subprime crisis" in terms of monetary supply and fiscal policies adopted by Japan in the face of various difficulties.

EXPRESS: Tourism Spending in Response to Stimulus Checks: Insights from Mental Accounting

The tourism sector closely monitors fiscal stimulus policies during economic downturns, as these policies are generally assumed to increase consumer spending to aid recovery. However, previous retrospective analyses fail to capture the intricacies of the individual decision-making process. The varying contexts in which stimulus measures are applied further disrupt predictable consumers' behavior, challenging the rational utility-maximization framework for household budget allocations. To address these gaps, a shift towards behavioral economics is essential for a nuanced understanding of how stimulus funds are allocated by recipients to tourism products. Through a mental accounting approach, this study suggests that factors at policy- (size and source), firm- (product presentation), and individual-level (tourism's importance and contribution to quality of life) jointly influence tourism spending derived from stimulus checks. This study underscores the significance of behavioral economics principles in shaping effective fiscal stimulus policies and marketing strategies within the tourism sector.

Does the mode of financing the budget deficit matter for inflation in Nigeria?

PurposeThe motivation for this study is to determine whether inflation in Nigeria is driven by the Central Bank’s direct advances and Treasury bills/bonds as modes of financing the budget deficit. Hence, it examines whether the method of deficit financing significantly impacts inflation in Nigeria.Design/methodology/approachBased on the nature of the study and the availability of data in Nigeria, this study employs the ARDL bound test estimation technique to analyse annual time-series data from 1981 to 2021.FindingsThe ARDL bounds test approach to co-integration revealed a long-run co-integrating relationship between Central Bank advances, Treasury bills/bonds, and inflation in Nigeria. Furthermore, the ARDL results provide evidence of a negative and significant relationship between bonds and inflation in both the short and long run. In contrast, Central Bank advances exhibit a statistically significant direct effect on inflation in the short run and an indirect effect in the long run.Research limitations/implicationsThe study focuses solely on Nigeria, limiting the applicability of the findings to other nations with differing economic structures or fiscal policies. Secondly, while the ARDL bounds testing approach is appropriate for the research context, it may not capture complex nonlinear relationships or structural breaks within the dataset. Lastly, the exclusion of additional potential determinants of inflation, such as external shocks, geopolitical factors, or exchange rate dynamics, could restrict the comprehensiveness of the analysis.Practical implicationsThis study provides empirical evidence supporting the view that, to achieve lower inflation in Nigeria, policymakers should prioritize using bonds to finance the deficit budget, as they have been shown to have a short-and long-term deflationary effect on the economy.Originality/valueThe novelty of this study lies in categorizing deficit budget financing (Central Bank advances and Treasury bills) and identifying which has the greatest impact on inflation in Nigeria.

The Rise and Entrenchment of the Antitax Movement: A Review Article

Abstract Despite the vast and growing literature on U.S. conservatism, one aspect of the rise of American conservatism appears to have garnered less attention: the antitax movement that has been at the center of the Rightward pivot in U.S. and global politics. Micheal J. Graetz's new book, The Power to Destroy: How the Antitax Movement Hijacked America is thus a welcomed addition to the still sparse literature exploring the historical relationship between U.S. tax resistance and modern American conservatism. Graetz has written a wide-ranging and persuasive, if at times perplexing, book about how a broad and varied array of Right-wing individuals and organizations—from politicians to evangelical ministers to television and radio personalities to The Tea Party and D.C.-based think tanks—all came together to ensure that hostility to taxes would become a unifying principle of the modern Republican Party and the cornerstone of current U.S. fiscal and economic policy. Relying on his own professional experiences and his deep knowledge of tax law, Graetz makes many significant and timely contributions not only to our understanding of the post-1960s development of American political conservatism but also to the contemporary constraints that continue to hamstring U.S. fiscal policymaking. There are times, though, when the reader is left wondering about Graetz's occasional and surprising authorial reticence, about the deep-seated factors behind the antitax movement, and about the historical contingency of just “how the antitax movement hijacked America.” Ultimately, The Power to Destroy is a fascinating and brilliant account of how a fringe social movement to cut taxes moved into the mainstream and transformed modern American political life.

The dynamics of optimal tax revenue generation for socio-economic development: Examining the influence of key macroeconomic indicators on United States’ fiscal sustainability

This study examines the relationship between key macroeconomic indicators and optimal tax revenue generation in the United States, with a focus on their implications for fiscal sustainability. The research explores the effects of interest rates, consumer price index (CPI), Real Gross Domestic Product (GDP), and unemployment rates on total tax revenue hence providing an empirical assessment of how these variables influence the stability and efficiency of tax collection. The research therefore aims to assess how fluctuations in these economic variables influence the federal government's ability to sustain fiscal balance and generate adequate tax revenue for socio-economic development. Notably, the research would explore the responsiveness of tax revenue generation to changes in monetary and fiscal policy measures. This study leverages historical data and econometric modeling by identifying trends in tax revenue responsiveness to economic changes hence offering insights into policy measures that enhance fiscal resilience. The findings shall contribute to the ongoing discourse on tax policy optimization by highlighting strategies that balance revenue sufficiency with economic stability. The study also aims to provide recommendations for tax policy reforms that enhance revenue stability while fostering an environment conducive to economic expansion. The research would emphasize the necessity of a balanced approach in designing tax policies that respond effectively to macroeconomic shifts hence ensuring long-term fiscal sustainability. This research would hence serve as a valuable resource for policymakers, economists, and tax authorities seeking data-driven approaches to strengthening the U.S. tax system's role in long-term fiscal sustainability. Keywords: Revenue Optimization, Fiscal Sustainability, Macroeconomic Indicators, Economic Stability, Consumer Price Index, GDP, Interest rate, Unemployment.

The Role of Electronic Tax Stamps in Collection of Excise Duty in Tanzania

This study investigates the role of Electronic Tax Stamps (ETS) in enhancing the collection of excise duty in Tanzania. Introduced in 2018, ETS was designed as a transformative tax administration reform aimed at improving the traceability, monitoring, and authentication of excisable goods such as alcohol, tobacco, and soft drinks. The Tanzanian government implemented this digital system to address challenges associated with underreporting, counterfeit production, and tax evasion that had long undermined the efficiency of excise duty collection. Drawing inspiration from global best practices, where countries like Mexico, the United States, and South Africa have used similar technologies to improve tax compliance and revenue performance, Tanzania adopted ETS as part of its broader strategy to strengthen public finance management. The system allows real-time tracking of excisable goods throughout the supply chain, promoting transparency, accountability, and improved reporting accuracy. Early results from the Tanzania Revenue Authority (TRA) indicate that excise revenue has significantly increased since ETS implementation, confirming its potential to enhance domestic resource mobilization. This study employs a time-series quantitative approach, using excise duty data from 2011/12 to 2023/24 to assess the impact of ETS. Regression analysis was conducted to compare pre- and post-implementation revenue trends, with findings showing a statistically significant increase of approximately TZS 435.72 billion in annual excise collections after ETS adoption. These results affirm the system’s effectiveness in supporting compliance and addressing inefficiencies in traditional tax collection methods. The study concludes that ETS plays a critical role in modernizing Tanzania’s tax administration, improving excise revenue performance, and fostering a more transparent and efficient fiscal system. It recommends further expansion of the ETS system, increased stakeholder engagement, and investment in digital infrastructure to sustain and amplify its long-term benefits.

The Financial Economic Development Agenda of the SADC Region

Financial markets have been used in developing economies to raise and maintain these economies social stability level, and to facilitate economic development. Economic development is about the upliftment of the living standards and freedom of the citizens by upgrading the quality of human lives. The study strove to realise the objective of determining if different forms of financial markets can influence economic development in selected Southern Africa Development Community (SADC) countries. Panel econometric techniques were utilised and periods examined spanned from 2007 to 2021. Economic development may not be quantified using a single indicator. Economic development as the dependent variable was measured by the Economic Development Index (EDI) which was constructed using indicators such as the Human Development Index, Economic Complexity Index and Gross Domestic Product per capita. The money market, stock market and foreign exchange market were found to negatively influence EDI in the long-run. Financial markets can be stated to influence the development and economic performance of the selected SADC countries. Based on the findings, it is recommended that monetary authorities and regulatory authorities ensure that the monetary, fiscal, and financial policies are well managed, and that these policies are implemented to develop the social and economic level of the country.

Impact of founder and descendant dynastic rulers on the fiscal instruments: investigation of the fiscal choices made by the chief ministers of Pakistan

ABSTRACT The topic of political dynasties has been a subject of extensive discourse within the field of political economy studies. This research investigates the varying effects of founder and decadent dynastic leaders on fiscal instruments. Through the utilization of data on the chief ministers who held office in the provincial assembly of Pakistan from 1990 to 2019, this study examines the impact of the founder and descendant dynastic rulers on several fiscal indicators, including revenues and expenditures. The study’s findings indicate that founding dynastic leaders exhibit notably elevated levels of revenue and expenditure in comparison to their descendants. Nevertheless, executive restrictions compel leaders of both types to behave in a responsible manner. Strong executive limitations positively influence the effectiveness of fiscal policies implemented by a founder dynastic leader. In contrast, the efficacy of such policies tends to be diminished when the leader is a descendant.

Fiscal Policy and Economic Stability in Nigeria

Keynesian fiscal policy framework and multiple regression analysis technique were used to appraise the impact of taxation and public expenditure on economic stability in Nigeria from 1981 to 2022. The results show that petroleum profits tax, capital expenditure and recurrent expenditure significantly influenced inflation in Nigeria, with increase in recurrent expenditure and petroleum profits tax causing inflation to rise. The study recommended that government should cut down recurrent expenditure, subsidise petroleum products and increase expenditure on public goods and services. Tax authorities should diversify tax revenue generation by fine-tuning current tax policies to capture more taxpayers into the tax net.

The Triple Direction of Local Government Debt Governance in the Perspective of Government Credit

With the rapid development of my country's economy and society and the deepening of fiscal system reform, local government debt issues have increasingly become an important factor affecting national fiscal security and regional economic stability. Based on the value connotation of local government debt governance from the perspective of government credit, this paper proposes innovative paths to improve local government debt governance from the aspects of strengthening top-level design, promoting debt management system reform and implementing talent introduction, aiming at the problems of mismatching financial power and administrative power, the need to improve the debt management system and the shortage of relevant professional talents in the current governance of local government debt. This paper provides some references for the modernization of the local government debt governance system.

Effectiveness of sugar taxation policies in Asia and Africa: a systematic review

BackgroundThe prevalence of major noncommunicable diseases (NCDs) such as cardiovascular disease, cancer, and diabetes is rising rapidly in Asia and Africa. One of the major modifiable risk factors for these diseases is the consumption of free sugars, commonly found in sugary drinks. To address this issue, some countries have implemented food taxes such as taxes on sugar-sweetened beverages as part of national public health policies to reduce its intake. The review aims to assess the effects of national taxation of sugar-sweetened beverages within the continents of Asia and Africa.MethodsEight databases (MEDLINE (Ovid), Embase, PubMed, Cochrane, SCOPUS, Web of Science and ProQuest) were searched, and seven studies were included in this review. Only studies focused on the taxation of SSBs in Asia and Africa until 30 June 2023 and those that studied the impact of national sugar taxation among their population were included. Simulation or studies evaluating the estimation effect of taxes were excluded. All eligible records were assessed for the risk of bias using the NIH Quality Assessment Tool for Observational Cohort and Cross-Sectional Studies, and the certainty of the evidence was reviewed.ResultsSeven studies included in this review investigated the impact of sugar tax policies in South Africa, India, Thailand, and Saudi Arabia. The interventions in these countries were implemented from 2017 to 2018 mainly for sugar-sweetened beverages. The studies provided evidence on changes in the volume of purchase, consumption, and sugar content of taxed items. Some evidence was found to suggest the positive impact of SSB taxes in reducing consumption of taxed items which ranged from 2.5% to 19% decrease. However, no study has reported on individual health outcomes.ConclusionThere is substantial evidence of a decrease in the consumption of taxed items, but there is uncertainty about the health impact of these outcomes. Future research should prioritize longitudinal studies assessing direct health impacts of SSB taxation policies. Additionally, generalizability of the results of such fiscal policies need to be investigated in lower economic settings and thus be of significance for uniform health policy reforms.Systematic Review Registration:https://www.crd.york.ac.uk/PROSPERO/view/CRD42023427030, PROSPERO (CRD42023427030).

Deflationary traps, agents’ beliefs and fiscal–monetary policies

Abstract We study the role of agents’ limited cognitive capabilities, combined with fiscal and monetary policies, in the generation of a deflationary trap. In order to do so, we employ a heterogeneous expectations New Keynesian model in which the agents’ forecasts are based on simple heuristics. Thanks to a learning mechanism, the model is able to generate endogenous changes in agents’ beliefs that we prove to have a crucial role in the characterization of a deflationary trap. We show that the probability of hitting the zero lower bound on the interest rate, and potentially entering a deflationary trap, is not only affected by the inflation target set by the central bank. This probability is also influenced by the governments’ focus on public debt stabilization and by the agents’ memory and willingness to learn. We also show that the impact of these factors is very significant for inflation targets in the range 0–3%, while an inflation target of $$4\%$$ 4 % isolates the system from the zero lower bound problem.

Green Innovation and Fiscal Spending: Decoding the Path to Sustainable Development

ABSTRACTThis study investigates the impact of environmental and economic factors on carbon emissions (CAR) in China from 2007 to 2020, considering the Environmental Kuznets Curve (EKC) hypothesis. We employ the MM‐QR approach to analyze asymmetric relationships between Green Total Factor Productivity (GTFP), Fiscal Expenditure Technology (FTE), Green Technology Innovation (GTI), Innovation Level (INN), Gross Domestic Product (GDP), Human Capital (HC), and carbon emissions (CAR). Findings reveal that GTFP, FTE, GTI, and INN exert significant negative impacts on cCAR, with these effects strengthening at higher quantiles. This suggests that advancements in green technology and fiscal policies promoting environmental technologies contribute to reduced carbon emissions. Conversely, GDP exhibits a positive association with CAR, potentially reflecting the initial stages of the EKC. GDP2 is also positively associated, indicating a potential turning point towards environmental degradation at higher income levels. Based on these results, the study proposes policy recommendations to enhance ecological well‐being and achieve net‐zero emissions. These include fostering human capital development for skilled labor in green sectors, promoting the development and adoption of green technologies, and increasing fiscal expenditure on environmental research and development (R&D). This research contributes to the field of environmental management by providing empirical evidence on the effectiveness of green economic policies and technological advancements in reducing carbon emissions. The findings offer valuable insights for policymakers aiming to achieve sustainable development in China and similar economies.

The Impact of Consumption and Tax Revenue on Gross Domestic Investment in Vietnam

This study examines the impact of consumption and tax revenue on domestic investment in Vietnam from 2000 to 2024 by employing a vector error correction model (VECM) to investigate both short- and long-run dynamics. These findings indicate that tax revenue positively influences investment in the long run, implying that an efficient tax system can facilitate capital accumulation and drive economic growth. Conversely, household consumption exerts a significant negative effect on investment, likely due to the crowding-out effect, in which excessive consumption constrains the capital available for productive investment. Furthermore, government expenditure positively contributes to investment, underscoring the crucial role of public spending in fostering private-sector development. However, the study finds no significant short-term effects of tax revenue, household consumption, or public expenditure on investment, suggesting that fiscal policies primarily shape investment trends in the long term. This study fills a critical gap in Vietnamese economic policy research by simultaneously examining the effects of taxation and consumption on investment. The findings underscore the need for tax policy reforms that incentivize investment, prudent public spending management, and regulatory measures to control excessive household consumption and ensure efficient capital allocation. In addition, maintaining macroeconomic stability and enhancing fiscal-monetary policy coordination are essential for improving investment efficiency. These findings offer policymakers practical insights into fostering long-term economic growth.

Fiscal transfers and public health services in China: a macro–micro analysis

IntroductionThis study innovatively integrates functional performance and systemic capacity dimensions to establish a comprehensive evaluation framework for public health services, addressing critical knowledge gaps in fiscal policy-health system interactions.MethodsUtilizing multi-source spatial panel data from 1,871 Chinese counties (2001-2020), we developed a novel assessment system combining structural equation modeling (SEM) and fuzzy comprehensive evaluation. Complementary analyses of 283 prefecture-level cities employed fixed-effects models with instrumental variables to examine fiscal transfer mechanisms.ResultsOur findings reveal: Significant positive association between fiscal transfers and service levels. Dual-path mediation effects: Fiscal expenditure restructuring; Health spending efficiency optimization. Micro-level health equity improvements.DiscussionThese evidence-based results provide policymakers with actionable insights for: Establishing performance-oriented accountability frameworks; Promoting health equity through fiscal system optimization; The proposed multidimensional evaluation system offers a replicable toolkit for global health governance assessment.

ISLAMIC ECONOMIC THOUGHT OF THE TIME OF RASULULLAH SAW AND KHULAFAURRASYIDIN: SOLU-TIONS AND CHALLENGES OF THE CONTEMPORARY TIME

This article examines Islamic economic thought during the time of Prophet Muhammad and the Khulafaur Rasyidin, which laid a significant foundation for Islamic economics. The study focuses on the relevance of Islamic economic concepts in addressing modern issues such as social inequality and economic exploitation. The research problem explores how early Islamic economic thought can provide solutions to current economic challenges. The study employs a literature review method, analyzing key Islamic principles such as zakat management, prohibition of usury, land distribution, and fiscal policies. Findings reveal that Islamic economic principles emphasize social justice and wealth distribution, offering viable solutions to contemporary economic problems. The article suggests integrating Islamic social justice principles into modern economic systems to reduce global economic inequality. In conclusion, the economic thought of the Prophet Muhammad and Khulafaur Rasyidin is highly relevant for building a more equitable and inclusive economic system.

Evolution of the Monetary and Financial System of the SRV: From National Unification to Integration into the Global Economy

The article investigates the progression of the monetary and financial system (MFS) in the Socialist Republic of Vietnam (SRV) from the time of the country's reunification in 1975 to the present day. The author identifies three distinct periods: the initial period (1976–1985), the period of reforms (1986–2006), and the period of international integration (from 2007 to the present). By drawing on scientific and official sources, the authors analyze the transformations in fiscal and monetary policies, as well as the functioning of financial institutions and markets. Particular emphasis is placed on the impact of openness and technological advancements after 2007, which have significantly contributed to enhancing the depth, accessibility, efficiency, and stability of the SRV’s MFS. The article also emphasizes the significance of considering both domestic factors and global trends for the further advancement of Vietnam’s MFS.

HOW MONETARY POLICY CAN IMPACT FINANCIAL CRISIS?

Central banks tend to participate in the market to calm and deflect the disasters generating a tangled relationship between monetary policy and financial crises.The money supply and interest rates that are present in the market as a result of central bank policy can affect asset prices and investor confidence.This study investigates the relationship between developing monetary policy options during a financial crisis and shedding light on the choices that lead to optimal balance and prevent development of existing weaknesses.It also emphasizes that, even with experience, there should be no loose ends and that precautions should be made to avoid long-term, systematic problems.The purpose of these monetary policy tools is to balance the needs of inflation control, economic growth, and financial stability. The RBI frequently makes changes to these tools because macroeconomic data and economic conditions are ever-changing.Throughout its recent economic history, India has suffered various financial crises, indicating to reasons, such as bad fiscal management, foreign shocks, or troubles with the banking industry. The vulnerability of India's financial system to both internal and external shocks is shown by crises such as the COVID-19 Crisis of 2020. In order to improve crisis management practices and encourage preventative actions to decrease the likelihood that such disasters will occur again, the RBI and the Indian government have strengthened financial legislation and regulations. Strategies that reduce the damage caused by financial crises are developed in order to comprehend the relationship between monetary policy and these occurrences. KEYWORDS: Monetary policy, Financial crisis, Macroeconomic, Central bank, Economic growth.

The Making and Unmaking of Progress: A Two-State Comparison of Organized Educators, Politics, and Fiscal Policy-Reform, 1880s - 1920s

Abstract The expansion of schooling in the early 20th Century required the modernization of state governments at the subnational level and related fiscal policy reform. Organized educators in California and Washington promoted legislation in 1920 that would increase each state’s support for schooling. In spite of similar fiscal policy goals and a shared commitment to the support of public schooling in both states, the legislation passed in California and failed in Washington. This comparative analysis of fiscal policy reform in the two states demonstrates the relationship between education fiscal policy and state formation, between tax policy and social change, the role of states as subnational sites for fiscal policy experimentation in the early twentieth century, and the role of policy feedback in fiscal policy reform. A close study of factors contributing to the divergent legislative outcomes illuminates underlying relationships between fiscal policy and associative action at state levels over the 70-year-period preceding the 1920 reform campaigns and demonstrates the centrality of education to research in fiscal sociology and political development.