Government Expenditure Research Articles

Towards Environmental Sustainability: The Impact of External Debt and Government Expenditure on Carbon Emissions in Somalia

This study aims to assess the effect of external debt and government expenditure on carbon emissions in Somalia. To do so, the study employed a rigorous econometric approaches such as autoregressive distributed lag model (ARDL), Fully modified least square (FMOLS), and Dynamic least square (DOLS). Findings demonstrated that external debt (LNED) positively and significantly affects carbon emissions. Results revealed that a 1%, or a point increase of external debt, rises 0.29% into the emitted emissions. Moreover, the study found that the long-run coefficient of government expenditure (LNGE) positively correlates with emissions. However, a 1% increase in total government expenditure significantly increases CO2 emissions by 0.05% in the long run. So, regarding the positive correlation between external debt, government expenditure, and carbon emissions, the study suggests that the government should strategically use its expenditures and external debt to fund environmentally sustainable projects. This approach aims to reduce carbon emissions while promoting sustainable development and balancing economic growth with ecological conservation.

An Empirical Analysis on Institutional Quality, Fiscal Policy and Debt Sustainability in Sub-Saharan Africa (SSA)

Many Sub-Saharan African (SSA) countries are finding it difficult to fulfill their massive debt repayment obligations, which bilateral financial institutions have declared to be unmanageable. Government institutions are to blame for such disparities in the budgetary components, which have been empirically confirmed to be detrimental. Part of the reason for SSA's income generation and debt management problems is related to fiscal policy components where there has been an unwarranted exaggeration of government expenditure. Accordingly, the current study used a panel Autoregressive Distributed Lag (ARDL) to examine how fiscal policy and institutional quality affected the sustainability of debt in 48 SSA nations between 2008 and 2022. The study’s findings suggested that the elements of fiscal policy (expenditure and revenue) as well as indicators of institutional quality (governance), such as control of corruption, effectiveness of government, political stability, absence of violence, regulatory quality, the rule of law, voice, and accountability, were important in explaining the long-term sustainability of public debt. The speed of adjustment to the long-run equilibrium was slow, which may be related to the unstable governance in each of the cross-sectional nations. Hence, the study concluded that the interactive effects of institutional quality and fiscal policy significantly influenced debt sustainability in the long run. The study’s conclusions can be very helpful to policymakers, particularly in those nations where major fiscal and external imbalances are being generated by low ratings for key institutional quality indices.

Good Demand-Supply Matching Practices as A Key to The Efficiency and Effectiveness of Free Nutritional Meal Programs: Leveraging Diverse Supply Sources to Maximize Government Expenditure Value

The free nutritious food program initiated by President-elect Prabowo and his cabinet aims to improve the quality of life of Indonesians, especially vulnerable groups. Various factors, including good demand and supply matching practices, largely determine the success of this program. The objective of this research is to analyze the best strategies and techniques for matching demand and supply, as well as for effective inventory management for this program. The research method used is qualitative, with data collection through literature study. After collecting the data, the analysis is done through several stages: filtering, data presentation, and conclusion drawing. The results show that good inventory management and supply-demand matching are key factors for the success of this program. Some strategies and techniques identified include careful planning, robust information systems, efficient supply chain management, good inventory management techniques, and diversification of supply sources. Diversifying supply sources helps the government reduce costs, improve food quality, support local economies, and strengthen national food security. By implementing these strategies, the government can ensure that the free nutritious food program can run efficiently and effectively and provide optimal benefits to the wider community.

The Role of Government Health Expenditure in Driving Economic Growth: Evidence from OECD Countries

This study examines the influence of government health expenditure and life expectancy on economic growth. The study makes use of panel data analysis and utilizes data from the OECD nations between 2000 and 2021. The study applies panel data analysis using POLS, FEM and REM models and dynamic GMM models. The study also gauges the moderating role of life expectancy on the relationship between government health expenditure and economic growth. The results indicate that government expenditure on health hurts economic growth. A detrimental relationship between life expectancy and economic growth indicates that higher life expectancy could result in elevated healthcare and financial expenses. Nevertheless, the interactive regression model suggests that there is no significant moderation of the association between government expenditure on health and economic growth by life expectancy, implying that the influence of government health expenditure on economic growth is generally unaffected by demographic changes. These findings emphasize the significance of differentiating between the short-term and long-term economic consequences of healthcare expenditure. This study offers insights into the optimization of public spending in OECD nations to promote sustainable economic growth and enhance public health outcomes.

The Impact of Government Expenditure on Economic Growth in Malaysia

This study experimentally investigates the relationship between economic growth and government spending in Malaysia from 1990 to 2022 using time series data. The study analyzes the impact of total government spending on economic growth, covering housing, healthcare, social services, military, and education while identifying which sector has the most effect on economic growth. The Autoregressive Distributed Lag (ARDL) method is employed to evaluate the effects of these expenditures. The findings demonstrate that, in the short run, all variables significantly affect economic growth, hence refuting the null hypothesis. However, only trade openness and labor spending positively impact long-term economic growth. Research indicates that housing and education expenditures are the primary long-term drivers of economic growth in Malaysia. The data suggest that the Malaysian economy contradicts the Keynesian theory, as less government spending appears to improve the real GDP growth rate. The inverse relationship between government spending and economic growth indicates that government expenditure may not be the primary catalyst for economic growth, hence supporting Wagner’s law. These findings provide policymakers with essential insights for optimizing government spending to improve economic development results.

Deconstruction of green product innovation drivers for regional export-oriented industrial enterprises in China: the product space perspective

Achieving green economic growth requires enterprises to develop and promote green products that balance environmental protection, intensive resource utilization, and sustainable development. However, under the externality assumption, the green market is often faced with the challenge of insufficient supply. Based on 2004–2018 panel data covering regional industrial enterprises in 30 provinces in China, this study empirically tests the composite driving mechanism of the effect of an increase in the regional green production capacity, organizational factors, and environmental policies on the green product innovation (GPI) of regional export-oriented industrial enterprises (REIEs). This study finds that the increase in regional green production capacity directly drives an improvement in REIEs’ GPI level, that the regional green technology level and degree of human capital accumulation are indirect driving channels between capacity increases and product innovation, and that environmental regulations and green credit have a positive moderating effect on the influence of increasing green production capacity on GPI. Further threshold regression analysis reveals that increasing green production capacity, foreign direct investment, digitization, and trade openness have an inverted U-shaped promoting effect on GPI and that the proportion of local government expenditure shows a diminishing marginal utility effect on GPI.

How Financial Development Is Driving the Growth and Environmental Dimensions of Sustainable Development in Africa: Heterogeneous Analyses

Globally, we face a policy dilemma between desiring more economic growth and safeguarding the deteriorating ecosystem, which have an apparent trade-off. Consequently, financing growth often comes with strong concerns for the ecological implications, which is yet to be empirically resolved. Hence, the current study examined the growth and environmental effects of financial development from three angles, each with a robust indicator, comprising financial development index, financial institution index, and financial market index. The scope of this study was financial development in 30 selected African countries from 1996 to 2021. This study extends the frontier of knowledge by estimating the moderating roles of regulatory quality and digitalization coupled with other control variables: renewable and nonrenewable energy, government expenditure, trade openness, and foreign direct investment. The empirical evidence relies on estimators such as common correlated effects (mean group), the system-generalized method of moment, and method of moment quantile regression. The findings from this study reveal that financial development propels economic growth but to the detriment of the ecosystem. However, when the interactive effects of regulatory quality and digitalization are considered, the negative externalities of growth-induced financial development are reduced. Furthermore, control variables such as renewable energy and foreign direct investment promote growth without escalating ecological damage. This is in contrast to nonrenewable energy, government expenditure, and trade openness, which propel economic growth at the expense of the ecological system. Policy recommendations that balance the trade-off between the two measures are put forward based on the research outcomes.

How Financial Development Heterogeneity, Macroeconomic Volatility, Domestic Investment, and Digital Economy Are Driving Sustainable Economic Growth in Africa

The roles of finance are well stipulated in the various indicators of the sustainable development goals (SDGS). However, the extant literature still finds conflicting outcomes of the finance-led growth. Hence, this study redirects empirical evidence by unbundling the effects of financial development on sustainable economic growth into aggregated and disaggregated, focusing on seven robust indicators (financial development index, financial institution index, depth, and access, and financial market index, depth, and access) in selected African countries from 1995 to 2021. Similarly, the intervening roles of government expenditure, digital economy, domestic investment, human capital, macroeconomic volatility, and trade openness are evaluated based on advanced estimators. Findings show that the seven indices of financial development drive sustainable economic growth in Africa both in the long and short runs. Similarly, government expenditure, digital economy, and human capital promote sustainable economic growth both in the short- and long-term periods. The driving effects of domestic investment are only noticeable in the long run. Conversely, trade openness and macroeconomic instability are noted to be growth-deterring. Policy insights that support sustainable economic growth in Africa emanate from the outcomes.

The Relationship Between the Development of the Art Industry and the Turnover of Economic Cycles

Abstract: In recent years, the area has grown significantly, creating a trend in art appreciation. This boom has led to a surge in the popularity of museums such as the National Gallery. This project aims to find out more about the economic contribution of art exhibitions. Using advanced time series analysis models including the intervention analysis model and vector autoregressive model, we obtained the following conclusions. First, the positive impact of low levels of economic development and high levels of government expenditure on the arts industry is obvious. Second, the growth of the arts industry has a small impact on most economic indicators. Third, the final impact of GDP on the arts industry is still uncertain due to the complex pattern of the model, with the possibility of a positive correlation with ln (art prices) being observed in the early stages of small GDP growth, while a quadratic pattern may be observed when the GDP index grows above a certain level and art prices fall Conclusion. Further research is needed to investigate the complex relationship between inflation and art prices. Our academic contribution mainly focuses on the multiple-way causal relationships between the economy, art exhibition, tourism, and education, which reveals the underlying mechanism of how art exhibitions promote the economy.

The Nexus between Government Expenditure and Economic Growth: Empirical Evidence from Nepal

The Nexus between Government Expenditure and Economic Growth: Empirical Evidence from Nepal

Taxpayers' Share of US Prescription Drug and Insulin Costs: a Cross-Sectional Study.

Drug prices affect government budgets directly through spending on public programs like Medicare and Medicaid, and indirectly via private coverage for public employees and tax subsidies for private insurance. Yet, the Senate parliamentarian ruled that the Senate could not use streamlined Budget Reconciliation to extend the Inflation Reduction Act's controls on insulin co-payment or drug prices to private insurers on the grounds that their expenditures do not affect the federal budget. To quantify insulin and other drug costs borne by federal, state, and local governments, including direct expenditures and indirect government subsidies that flow through private insurers. Cross-sectional analysis of expenditures for outpatient retail prescription drugs reported by respondents and their pharmacies in the 2019 Medical Expenditure Panel Survey (adjusted downward for drug rebates), supplemented with information on employment-related insurance from the US Office of Management and Budget and other sources. The civilian non-institutionalized US population. Direct (payments by public health insurance programs) and indirect (taxpayer-funded payments via private insurers) government expenditures for outpatient retail drugs. Direct government expenditures for outpatient retail prescription drugs totaled $154.85 billion in 2019, including $15.68 billion for insulin. Indirect government expenditures channeled through private insurers totaled $53.59 billion (including $5.48 billion for insulins). Those indirect expenditures encompassed $32.32 billion in tax subsidies for employer-sponsored private coverage, $25 million for subsidies to private Affordable Care Act marketplace plans, and $21.24 billion for government-paid premiums for public employees and retirees. Overall, government expenditures for outpatient retail prescription drugs totaled $208.44 billion, 58.76% of all-payer spending and 65.96% of spending for insulin. Governments directly or indirectly fund most drug purchases, including substantial expenditures that flow through private insurers. Hence, prices paid by private insurers impact government budgets, supporting the view that government should be allowed to regulate drug prices.

Macroeconomic volatility and terrorism incidents in Africa

AbstractThis article investigates the impact of macroeconomic volatility on terrorism in 38 African economies spanning the period from 1980 to 2012, using available data. It examines four categories of terrorism markers: domestic, transnational, uncertain, and total, and their correlation with the volatility of four macroeconomic indicators—inflation, output growth, domestic credit to the private sector, and government expenditures. The study employs the negative binomial regression estimator on both the conditional variance structures of the generalized autoregressive conditional heteroskedasticity (GARCH) and exponential GARCH (EGARCH) and the unconditional measure of a 3‐year interval time varying of measuring macroeconomic variables' volatilities on other regressors. I find, first, that inflation volatility is a significant predictor of all terrorism markers, except for transnational terrorism. This implies that high inflation volatility is linked to increased domestic terrorism. Second, the role of domestic credit to the private sector in mitigating transnational terrorist activities highlights the importance of stable private sector access to credit in reducing such incidents. Third, government consumption expenditure volatility has a dual effect on terrorism: it amplifies domestic terrorism but serves as a mitigating factor for total terrorism. This indicates that stable government expenditure can reduce overall terrorism, but might increase domestic terrorism. Last, other variables—such as population, ethnicity, conflicts, surface areas, and lagged terrorism values—are also found to influence the examined terrorism measures. For robustness, I employ alternative statistical techniques, including Poisson Pseudo‐maximum likelihood (PPML) estimation with multiple high‐dimensional fixed effects (HDFE). In summary, this study emphasizes the critical role of addressing inflation volatility in macroeconomic policies as a primary measure to counter terrorism. Stable economic conditions, particularly in relation to inflation, can significantly contribute to reducing terrorism in African economies.

Financial inclusion, financial stability, and poverty reduction in Africa

AbstractFinancial inclusion universally remains one of the critical means to end poverty in the world, especially Africa, where the level of poverty is high. It has however been argued that financial inclusion equally has the tendency to destabilize the financial system, thwarting the poverty reduction efforts, which necessitates the interrogation of the relationship between the variables. This study therefore investigates how financial stability mediates the financial inclusion and poverty reduction relationship in Africa. Using the panel Autoregressive Distributive Lag model, covering a period of 2004–2020, the study found that financial inclusion is positively related to financial stability in both short and long‐run, with education, Gross National Income per capita (GNI) and domestic credit to private sector, contributing to financial stability, and trade openness negatively related to financial stability in the long‐run. The study further established that financial stability is positively related to household consumption expenditure as such leads to poverty reduction with trade openness, government expenditure, GNI, education, domestic credit to private sector, and institutional quality contributing significantly to poverty reduction. This confirms the mediating role financial stability plays in enhancing the impact of financial inclusion on poverty reduction in Africa and must therefore be given the necessary attention, through proper regulatory mechanisms.

The Impact of Trade Openness on the Industry Reality in Iraq for the Period (2004-2022)

Iraq is one of the prominent countries that used to have important industries and enjoyed consumer acceptance, competitiveness, and presence in regional and global markets. However, after 2003 and due to trade liberalization, there needed to be more in the structure of the Iraqi economy. This directly affected the reality of the Iraqi industrial sector, leading to the entry of goods and products from all over the world. With the increase in population and government expenditures, which relied on commodity imports to meet local needs, all aspects of industry in the country were eliminated. The importance of research lies in shedding light on the role of international trade (import and export) in global economies, highlighting the shortcomings in trade policy management, demonstrating the impact of trade openness on the industrial sector's contribution to economic development, and the need for realistic measures to rescue this vital sector from deterioration in Iraq. Moreover, the research problem is based on the direct negative impact of trade liberalization policy on the reality of the industrial sector in the country. Increased reliance on foreign sources to meet local economic needs is attributed to the production apparatus's deficiencies, backwardness, and stagnation, rendering it unable to meet total domestic demand. The research aims to shed light on the role of foreign trade in global economies and to clarify the shortcomings in trade policy management, as well as the extent of the impact of trade liberalization on the reality of the industrial sector in achieving economic development. The research found that the industrial sector in Iraq was negatively affected throughout the period (2004-2022) due to the compulsory trade liberalization policy, which led to the shutdown of factories and plants because of the low prices of imported goods. Paper type Research paper.

Effects of Income Distribution and Fiscal Policy on Growth in Turkey: A Kaleckian Analysis

This study examines the effects of functional income distribution and fiscal policy on growth in Turkey. A post-Kaleckian open economy model is used to analyze the Turkish economy by integrating fiscal policy tools into the econometric model, such as tax burdens on labor and capital and government expenditure for 1988–2017. The novelty of our study is that it considers the private profit motive and rollback of government activities by including public-private partnership investments in the model. Our findings suggest that government ideologies in providing services through different channels do not cause alteration in the domestic demand regime; it stays wage-led in all scenarios we applied. Yet, the overall regime turns out to be profit-led since net export is sensitive to labor costs. JEL Classification: E12, E62, L33

Economic Uncertainty and Impact of Governments’ Spending on Economic Growth: An Empirical Study of Emerging Market Economies*

The COVID-19-led economic crisis has rekindled scholarly interest in the relationship between government spending and economic growth. Further, there is an emerging realm of empirical literature that focuses on the dynamics of this relationship during times of uncertainty. Against this backdrop, this study investigates the effect of government expenditure on economic growth during economic uncertainty and the role of economic confidence in the transmission mechanism of policy shocks utilizing a panel generalized method of moments (GMM) framework for 13 select emerging market economies (EMEs). The findings suggest that the beneficial impact of government spending during economic uncertainty is not significantly different from regular times; however, its effectiveness is enhanced during contractionary periods. Government spending, on the other hand, does not have a statistically significant effect during expansionary phases. Furthermore, unanticipated government spending boosts economic confidence, especially during contractionary phases. Governments in EMEs should implement countercyclical fiscal policies selectively to stimulate aggregate demand and facilitate economic recovery, prioritizing targeted spending in confidence-building initiatives and key sectors. Spending in high multiplier sectors during contractionary periods can boost economic activity and speed recovery, fostering stability and growth amidst uncertain economic conditions. JEL Classification E32, H30, H32

Factors Influencing Inflation: Insights from the Nepalese Economy

Inflation is a persistent issue in developing nations such as Nepal, resulting in serious economic and social consequences. This article examines the macroeconomic determinants of inflation in Nepal, considering the variables as government expenditure, exchange rate remittances, real GDP, and the consumer price index of India. Using the time series data from 1975 to 2023. It employs the Engel-Granger two-step cointegration test to examine the short- and long-term causal connections between Nepal's consumer price index (inflation) and all of these variables. The augmented Dickey-Fuller unit root test confirms that the variables are stationary at first difference, suggesting they possess an integrated order of I. The Engel-Granger test established that there is co-integration among the variables. Additionally, the error correction term (ECT) was found to be statistically significant, with a negative coefficient. The causal association between the selected dependent and explanatory variables in Nepal is both significant and persistent. The empirical findings suggest that India's inflation highly affects inflation in Nepal. Furthermore, the enduring effects of broad money supply and government expenditure are also substantial factors. The results indicate an inverse relationship between inflation and real GDP in Nepal, whereas remittances have no significant impact on consumer prices in the nation. So, it is vital to control inflation to be able to deal with poverty and economic growth. Policies are needed to keep the inflation target range around the optimum inflation rate to accelerate the pace of economic growth and ensure that the adverse effect inflation has on economic growth is minimized.

The School Budget Management under the Nakhon Ratchasima Primary Educational Service Area Office 4

Background and Aims: Budgeting in its present form began in England around the 16th-17th centuries. During that time The House of Representatives successfully reserved the power to approve government revenue and expenditures. This shows that current budgeting is related to the evolution of the governance system. After the preparation of this budget, it was extended to local government organizations, educational institutions, and other agencies, both public and private. The purpose of this research is to study and compare the level of opinions of personnel regarding budget management of schools under the Nakhon Ratchasima Primary Educational Service Area Office 4. Classified by position, school size, and work experience. Including the study of guidelines for developing budget management for schools under the said organization. Methodology: The sample used in the research consisted of 196 school administrators and heads of budget management groups of educational institutions under the Nakhon Ratchasima Primary Educational Service Area Office 4, which were selected using a stratified random sampling method. The research instrument was a questionnaire with a 5-level rating scale with an IOC between 0.80 - 1.00 and a confidence value of 0.85. In addition, a structured interview was used to collect data for data analysis. Various statistics were used, including frequency, percentage, mean, and standard deviation, T-test and F-test. Results: The results of the research are as follows: (1) School budget management Under the jurisdiction of the Nakhon Ratchasima Primary Educational Service Area Office 4, the overall level is at a high level. And when considering each aspect, it was found that budget management was at a high level in every aspect. (2) Comparative analysis of budget management of schools under the jurisdiction of the Nakhon Ratchasima Primary Educational Service Area Office 4, found to be significantly different at the 0.05 level. When classified by position but when classified by school size and work experience, no differences were found. (3) The budget management guidelines of schools under the Nakhon Ratchasima Primary Educational Service Area Office 4 that should be implemented include: Analysis of strengths and weaknesses Budget allocation is adequate and comprehensive. Having an internal audit system Creating a fundraising plan and using resources from outside agencies or stakeholders. Including having proof of receipt and payment. Preparing accurate accounts according to regulations and reporting information on supplies and equipment (M-OBEC), including creating up-to-date information on buildings, land, structures, and assets (B-OBEC). Conclusion: Budget management of schools under the jurisdiction of the Nakhon Ratchasima Primary Educational Service Office, District 4, that were all assessed were considered to have a high level of expertise. To ensure continued efficiency and transparency in financial management. There should be various guidelines such as detailed data analysis. Establishment of an internal audit system and recording information correctly All of which should be strictly implemented to strengthen confidence in the budget management process.

Oversight of Government Spending on Combating Covid-19

The research aims to analyze the federal government's expenditures in 2020 and 2021 related to combating the COVID-19 pandemic in search of fraud indicators. This period was characterized by a sudden increase in public spending, accompanied by less stringent procurement processes. The Newcomb-Benford Law describes the frequency of leading digits in datasets and is presented as an effective tool for identifying anomalies and fraud in financial records, being widely explored in various fields, particularly in audits and accounting. A comparison was made between the observed and expected frequencies for the first, second, and first two digits of the committed values, segregated by year or procurement method. The analysis was conducted through graphs and statistical tests to verify the adherence of distributions to the Newcomb-Benford Law. Commitments made in 2020 showed better adherence than those in 2021, suggesting a higher probability of manipulations or fraud in the second year of the pandemic. Additionally, expenditures resulting from bidding processes were more compliant when compared to non-bid expenditures, confirming the perception that there is a higher likelihood of manipulation or fraud in non-bid spending. The research reveals indications that can be interpreted as warnings for oversight and control bodies, with the proposed approach serving as a mechanism for auditing government expenditures, assisting in the selection of samples that require detailed analysis by auditors and investigator.

The Impact of Trade Openness on the Reality Industry in Iraq for the Period (2004-2022)

Iraq is one of the prominent countries that used to have important industries and enjoyed consumer acceptance, as well as competitiveness and presence in regional and global markets. However, after 2003 and due to trade liberalization, there was a general weakness in the structure of the Iraqi economy. This directly affected the reality of the Iraqi industrial sector, leading to the entry of goods and products from all over the world. With the increase in population and government expenditures, which relied on commodity imports to meet local needs, all aspects of industry in the country were eliminated. The importance of research lies in shedding light on the role of international trade (import and export) in global economies, highlighting the shortcomings in trade policy management, demonstrating the impact of trade openness on the industrial sector's contribution to economic development, and the need for realistic measures to rescue this vital sector from deterioration in Iraq. And the problem of the research is based on the direct negative impact of trade liberalization policy on the reality of the industrial sector in the country. Increased reliance on foreign sources to meet local economic needs is attributed to the deficiencies, backwardness, and stagnation of the production apparatus, rendering it unable to meet total domestic demand. The aim of the research is to shed light on the role of foreign trade in global economies and to clarify the shortcomings in trade policy management, as well as the extent of the impact of trade liberalization on the reality of the industrial sector in achieving economic development. The research found that the industrial sector in Iraq was negatively affected throughout the period (2004-2022) due to the compulsory trade liberalization policy, which led to the shutdown of factories and plants as a result of the low prices of imported goods. Paper type Research paper.