Increase In Government Expenditure Research Articles

The dynamic impact among oil dependence volatility, the quality of political institutions, and government spending

This paper empirically examines the direct and indirect effect of the role of democracy, and, in turn, the effect of oil dependence volatility on governmental expenditure in oil exporting countries. To achieve this aim, we apply a panel Vector Auto-Regressive (PVAR) model along with panel impulse response functions from the period 1983 to 2016. The findings show that the quality of political institutions, it is observed that in democratic countries an increase in oil volatility leads to an increase in government expenditure. In contrast, in non-democratic countries, governments respond to oil volatility fluctuating between the positive and negative depending on the quality of political institutions; the more some attributes of democracy are seen, the greater the expenditure. This difference in response between them can be attributed to a variation in institutional quality. Therefore, an improvement in strategic risk planning together with greater government transparency could lead to institutional quality improvement.

THE IMPACT OF VIOLENT CRIME ON TOURIST ARRIVALS IN MALAYSIA

The tourism industry plays an important role in boosting economic growth, providing job opportunities, and reducing the poverty rates in many countries. For this reason, the factors influencing tourism should be investigated, to ensure continued growth within the industry. Few studies had examined the effect of violent crime on tourist arrivals and price competitiveness in Malaysia. An increasing criminal activity and a rise in prices may discourage tourism arrivals. This paper applies an autoregressive distributed lag (ARDL) model to estimate Malaysia's determinants of tourism arrivals, on the period from 1986 to 2016. Tourism demand is modeled as a function of economic growth, tourism accommodation, prices (proxied by exchange rates and inflation), unemployment, and the crime index to proxy criminal activity in Malaysia. The results showed that inflation can reduce the number of tourists in the long run and in the short run. Similarly, the results also show that a higher exchange rate and violent crime index can reduce the number of tourists visiting Malaysia in the short run. Economic growth can attract more tourists to Malaysia in the long run.These findings are important for the formulation and implementation of policies. The Malaysian government should combat violent crime in the first place to prevent any reduction in tourist arrivals. Increasing government expenditure on national security could lead to a reduction in the violent crime index, thus increasing the number of tourist arrivals in Malaysia.

Value Added Tax Administration and its Implications for Tax Performance

In developing countries, tax reforms have focused on minimising trade taxes, switching to value-added tax (VAT), and reduction of direct tax rates; recently, reform efforts have shifted to improving tax administration. Reportedly, Namibia, like many other developing countries, has been experiencing increasing government expenditure and declining revenues implying the government has not been mobilising sufficient domestic resources. A number of factors could be driving the implied weak tax performance including inefficient tax administration, corruption, and distrust of tax administration. Adopting a descriptive concurrent mixed methods research strategy, this study assesses the achievement or otherwise of VAT implementation in Namibia on tax performance. The study findings include inadequate taxpayer education, insufficient information integration and communication among taxpayers and administrators, and inadequate VAT policy implementation capacity, among others. Improvements could include technology adoption, quality taxpayer education, and awareness aimed at boosting taxpayer morale.

The Impact of Government Expenditure in Agriculture and Other Selected Variables on the Value of Agricultural Production in South Africa (1983–2019): Vector Autoregressive Approach

South African agriculture has the potential to stimulate growth in other economic sectors, but dwindling budgetary allocations to agriculture over time and the nature of other impacting factors on the value of agricultural production have not received much attention in recent times. Therefore, the present study examined the effects of government expenditure in agriculture, annual average rainfall, consumer price index, food import value, and population on the value of agricultural production with a specific focus on government expenditure in agriculture for the period 1983 to 2019. Using the Johansen cointegration test, the results reveal that there is a long-run relationship among the variables. The Granger causality test results suggest that government expenditure in agriculture does not Granger cause the value of agricultural production. However, the two variables are linked through other variables in the model, such that an increase in government expenditure in agriculture, average annual rainfall, and population were shown to ultimately increase the value of agricultural production based on vector autoregressive (VAR) model analysis. In contrast, an increase in the consumer price index and food import value is detrimental to the value of agricultural production. These studies’ findings have policy implications for increased government expenditure.

Government expenditure–shadow economy nexus: the role of fiscal deficit

PurposeThe effects of government expenditure on the shadow economy have been investigated. However, the effect from a moderating factor that affects this relationship has been largely ignored in the existing literature. This paper investigates how fiscal deficit moderates the effects of government expenditure on the shadow economy for 32 Asian countries for the past two decades since 2000.Design/methodology/approachThe authors use various techniques, which allow cross-sectional dependence and slope homogeneity in panel data analysis, to examine this relationship in both the long run and short run. The analysis also considers the marginal effects of government expenditure on the shadow economy at different degrees of fiscal deficits.FindingsEmpirical findings from this paper indicate that an increase in government expenditure and fiscal deficit will increase the shadow economy size. Interestingly, the effects of government expenditure on the shadow economy will intensify with a greater degree of the budget deficit. The authors also find that enhancing economic growth to improve income per capita and extending international trade appears to reduce the shadow economy in the Asian countries.Practical implicationsThe authors consider that policies targeting reducing shadow economy should follow conventional economic policies on economic growth, unemployment and inflation.Originality/valueTo the best of the authors’ knowledge, this is the first empirical study conducted to examine the moderating role of fiscal deficit in the government expenditure–shadow economy nexus in Asian countries.

How Government Size Expansion Can Affect Green Innovation-An Empirical Analysis of Data on Cross-Country Green Patent Filings.

The expansion of government size will have dual effects on a country’s green innovation. An appropriately sized government size increases marginal productivity and stimulates the development of green innovation by increasing government expenditure. On the contrary, an excessively sized government creates a huge administrative agency, which not only increases the tax burden but also damages social welfare by excessive intervention. Therefore, the effect of government size on green innovation is not linear. In order to prove this proposition, this study examines the impact of government size on green innovation in 166 countries between 1995 and 2018, using a two-way fixed effects model. The results reveal an inverted U-shaped relationship between government size and the level of green innovation, indicating that optimal government size may maximize a country’s green innovation output. The results further suggest that this inverted U-shaped relationship is mainly influenced by environmental regulations and financial support. Finally, our heterogeneity analysis demonstrates that the inverted U-shaped relationship is more pronounced for countries with high organizational inertia and more R&D expenditure than for those with low organizational inertia and less R&D expenditure. This finding makes up for the research gap between government size and green innovation and provides a reference for countries to formulate the optimal government size to improve the level of green innovation.

An Empirical Evidence of Energy Consumption and Economic Development Dynamics in Nigeria: What is the Role of Population?

The place of population growth in the linkage between the consumption of energy and economic development in Nigeria was examined in this study. Annual data on total consumption of energy, the growth of population, and economic development were employed among other variables for the time 1995 to 2019. We used Autoregressive Distributed Lag -Error Correction Model (ARDL-ECM). Energy consumption had a feedback negative substantial relationship with economic development in the long run while in the short run, energy consumption had a negative significant impact on economic development. The population growth had a negative significant impact on economic development, and a positive substantial effect on energy consumption. However, energy consumption is not impacted on by oil price. Consequently, we advocate for the increase in the quality of energy, increasing government expenditure in the provision of energy supply, and the population maximization of energy for the achievement of economic development in Nigeria.

Fiscal consumption and private consumption in Europe: what have we learned?

ABSTRACT In this paper we contribute to the long literature on how fiscal policy affects the real economy. In particular, we focus on how government consumption affects private consumption for a pool of European economies. We estimate panel vector error correction models between the two consumption variables for the EU 28 + Norway and Switzerland, for the two periods before and after 2008. The results show that government consumption affects private consumption differently in the periods before and after 2008. This means an increase in government consumption could have a positive impact on private consumption.

The Impact of Government Expenditure on Inflation: Evidence from Sri Lanka and India

This study analyses the impact of government expenditure on inflation in Sri Lanka and India from 1977 to 2019, using ARDL Co-integration, Bounds test, Error Correction version of the ARDL model and the Granger Causality test, while employing inflation, government expenditure and interest rates as study variables. Results for both Sri Lanka and India reveal a statistically significant and a positive relationship between government expenditure and inflation in the long run: A 1% increase in government expenditure tends to increase inflation by 0.0793% and 4.6469% for Sri Lanka and India respectively. The coefficient of the Error Correction Term for both countries carry a negative sign and are statistically significant, indicating an adjustment towards equilibrium at a speed of 63.8% and 93.94% respectively, one period after exogenous shocks. Granger causality test indicates a unidirectional causality stemming from government expenditure towards inflation only in the case of Sri Lanka. This highlights Sri Lanka’s need to manage its public expenditure and its impact on money supply in order to achieve price stability. It is advisable for fiscal as well as monetary policy makers to work closely so as to control inflationary pressure on the economy resulting from rising government expenditure.

Stabilizing economic growth: Growth target and government expenditure since World War II

This paper investigates how the government stabilizes economic growth from the perspective of government expenditure. We contribute a method to identify the government expenditure aimed at stabilizing growth and empirically examine it using a dataset of economic growth targets. We find that when the economy encounters adverse shocks, government expenditure increases significantly by 1.1 percentage points on average for every one percentage point increase in the growth target. We document the following patterns of stabilizing growth: (1) government increases expenditure on economic affairs rather than on other functions; (2) government expenditure is financed by current revenue; and (3) it is a temporary behavior to stabilize growth. This paper also suggests that stabilizing growth by increasing government expenditure is a global phenomenon.

Studying the relationship between women and the environment in developing countries

PurposeThe purpose of this study is to examine whether there is a unidirectional or a bidirectional relationship between women and the environment, and to further study the effect of women on environmental quality.Design/methodology/approachTo achieve this purpose, a Granger causality test and a random effects panel data model are used to study women–environment relationship in developing countries. Error correction model (ECM) is the chosen estimation technique. A Granger causality test is used because of its frequent use in examining the existence of a unidirectional or a bidirectional relationship between two or more variables. A random effects panel data model is used as it has proven to be more efficient than the fixed-effects panel data model.FindingsWomen Granger-cause environmental quality while the opposite is not true in developing countries in the long run. This indicates the existence of a unidirectional relationship between women and the environment when the long-run relationship is considered. However, when considering the long- and short-run relationship together, the results indicate the presence of a bidirectional relationship. The empirical results of the random effects panel data model through ECM estimation indicate the positive effect of women on improving environmental quality as illustrated by the coefficient of the current change of women. This shows that women are concerned about environmental degradation. In addition, the empirical results highlight the persistence of CO2 emissions. Results also confirm that foreign direct investment inflows lead to further environmental degradation. However, education and trade openness coefficients are found insignificant at the current period.Research limitations/implicationsThe research results have great implications on women empowerment, the reduction of gender bias and the increase in government expenditure on women’s education and health because of women’s positive effect in improving environmental quality.Originality/valueTo the best of the author’s knowledge, this is the first paper that examines the two-way relationship between women and the environment and, hence, it fills the gap present in the literature.

Assessing the nexus between fiscal policy, COVID-19, and economic growth.

The COVID-19 issue deteriorated South Africa’s already dire economic situation, exacerbated by years of considerable debt increase. The COVID-19 pandemic has disrupted trade to such an extent that some enterprises are barely working at a quarter of their potential. Furthermore, economic agents delay economic decisions while waiting to see how the crisis develops. According to some economists, increased government expenditure will raise GDP enough to keep the country’s debt-to-GDP ratio steady and restore fiscal sustainability. We use a panel data model to estimate a fiscal reaction function, which we then apply to historical data to assess the government’s prior efforts to maintain or restore budgetary sustainability. We calculate the impact fiscal balance, government expenditure, interest rate, and revenue changes that the government will have to make to restore the country’s fiscal stability due to the financial impact of the COVID-19 issue.The findings show that fiscal balance and tax revinue have a significant impact on the economics growth, while government expenditure and corruption reduce the growth of the country.

The market for electric vehicles in China: modelling the abolition of policy incentives

ABSTRACT Government policies that contain incentives have promoted the development of China’s electric vehicle (EV) market from its inception. However, following the dramatic evolution of the EV market, the incentives impose a considerable burden on the State. It is time to consider abolishing various policy incentives. This paper uses the discrete choice experiment (DCE) model to study how consumer behaviours are influenced by the different policies. A system dynamics simulation model is constructed to simulate long-term EV development trends while considering the impacts of these policies. The simulations use the results from the DCE model to measure the sensitivity to policy changes of consumer purchase intentions (measured by consumers’ willingness to purchase EVs). Finally, in relation to likely future policy trends, this study designs policy portfolio scenarios that are a strong mix, mid-mix, weak mix, or fully market-oriented with varied timing for policy implementation, and that are likely to affect the growth of China’s EV market. The results of the simulation indicate that the optimal policies: (1) continue to increase government expenditure and support for the construction of charging facilities; (2) make charging more accessible and convenient; and (3) implement bans on the sale of fossil-fuelled cars. The results also show that the ideal timing for banning the sale of fossil-fuelled cars and, in parallel, cancelling current incentive policies (e.g. consumer purchase subsidies) is around 2025. These changes could reduce government expenditure and thus confer substantial financial savings, and they would effectively promote a significant increase in EV sales. Key policy insights Increasing support for the construction of charging facilities, improving the access and convenience of charging, and implementing bans on the sale of fossil-fuelled cars could increase consumer willingness to purchase EVs in China. Support for the construction of basic charging facilities should continue to increase and accelerate leading up to 2025; this would promote a significant increase in EV sales. To send clear near-term signals to the EV market – both consumers and producers, the Chinese government could usefully implement a ban on the sale of fossil-fuelled cars by around 2025 and in parallel abolish the current incentives policy for EVs. Abolishing current policy incentives (e.g. subsidies and VAT tax exemption) in the same time frame as other policies (e.g. support for charging infrastructure and a ban on fossil-fuelled cars), could lead to substantial financial savings to the government and a rapid scaling in the market for EVs. Lessons learned from China’s potentially large and rapidly growing EV market will have implications for other countries in Asia and beyond.

Tuberculosis, HIV/AIDS and Malaria Health Services in sub-Saharan Africa – A Situation Analysis of the Disruptions and Impact of the COVID-19 Pandemic

BackgroundThe unprecedented and ongoing COVID-19 pandemic has exposed weaknesses in African countries’ health systems. The impact of shifted focus on COVID-19 for the past 2 years on routine health services, especially those for the epidemics of Tuberculosis, HIV/AIDS and Malaria, have been dramatic in both quantity and quality. MethodsIn this article, we reflect on the COVID-19 related disruptions on the Tuberculosis, HIV/AIDS and Malaria routine health services across Africa. ResultsThe COVID-19 pandemic resulted in disruptions of routine health services and diversion of already limited available resources in sub-Saharan Africa. As a result, disease programs like TB, malaria and HIV have recorded gaps in prevention and treatment with the prospects of reversing gains made towards meeting global targets. The extent of the disruption is yet to be fully quantified at country level as most data available is from modelling estimates before and during the pandemic. ConclusionsAccurate country-level data is required to convince donors and governments to invest more into revamping these health services and help prepare for managing future pandemics without disruption of routine services. Increasing government expenditure on health is a critical part of Africa's economic policy. Strengthening health systems at various levels to overcome the negative impacts of COVID-19, and preparing for future epidemics will require strong visionary political leadership. Innovations in service delivery and technological adaptations are required as countries aim to limit disruptions to routine services.

On the Sustainability of Fiscal Policy in Sierra Leone

The aim of this paper is to empirically investigates whether Sierra Leone fiscal policy is sustainability. In this regard, I employ different econometric methodologies used in the empirical literature to investigates the sustainability of fiscal policy. The empirical findings that emerged from this study are useful on one hand to creditors, serving as a guide for lending to the government, and, on the other hand to the government, cautioning policymakers to avoid public debt from exploding that could possibly lead to fiscal insolvency and/or debt distress. I start by testing for the stationarity properties of the primary balance, the necessary condition for a sustainable fiscal policy. The findings indicated that Sierra Leone fiscal policy is sustainable under the review period. Next, I test for cointegration relationship between government revenue and government expenditure, the alternative approach to test for a sustainable fiscal policy. On this note, I employ both the Dynamic Ordinary Least Square (DOLS) and the Johansen cointegration techniques. Both approaches confirmed the existence of a cointegration relationship between government revenue and government expenditure. The estimated cointegration coefficients show that fiscal policy during the review period is weakly sustainable and the cointegration between government spending and revenue is positive (but less than one) and statistically significant. This implies that for each percentage point of GDP increase in government expenditure, government revenues increase by less than one percentage point of GDP. Additionally, I proceeded to endogenously account for structural breaks in the cointegration relationship, which is relevant for Sierra Leone, a country that has witnessed significant changes over the years, including the Structural Adjustments Programme (SAP) in the 1980s, tax reforms in the 1990s and 2000s, etc. I found evidence of a significant structural break occurring in 1984. There also exists uni-directional causality running from government revenue to government expenditure. This causality result is in line with the tax-and-spend hypothesis as proposed by Friedman (1978).Finally, I estimate an error correction model and the error correction term shows that the speed of adjustment from the expenditure side works faster than that of the revenue side to correct the fiscal disequilibrium.

Political Budget Cycles in Autocracies: The Role of Religious Seasons and Political Collective Action

AbstractFor autocrats ruling over religious populations as in many Muslim majority countries, threats of mass collective action and religious mobilization are risky to ignore, being potentially detrimental to authoritarian survival. Religious seasons, such as Ramadan, could raise the seriousness of such threats. Accordingly, incumbents might adopt expansionary fiscal policies to avoid the escalation of political discontent at these times. Focusing on Egypt's fiscal policy between 2006 and 2019, I find that although the religious season of Ramadan is associated with modest increases in government expenditure and welfare spending, this relationship is dependent on the level of political threats facing the regime. Government spending is higher in Ramadan's season when it is preceded by more episodes of anti-regime collective action. This evidence suggests that the interaction between the religious and political contexts could generate political budget cycles outside electoral seasons.

Defaulting on Covid debt

The COVID-19 pandemic causes sharp reductions in economic output and sharp increases in government expenditures. These increase the riskiness of sovereign debts, especially in emerging economies. This paper proposes a framework to study debt sustainability. The economy is subject to productivity and expenditure shock. The government sets distortionary labour taxes and decides whether to repay its past domestic and foreign obligations. Foreign default is more likely after a negative productivity shock, while domestic default is more likely after a negative expenditure shock. This mechanism finds support in the data. Recent proposals that would ease the burden of foreign debt after COVID-19 would not prevent a wave of domestic defaults.

Simulating the Impact of the Economic Sustainability Plan on the Performance of the Nigerian Economy in the Post COVID-19 Era

This study examines the impact of Economic Sustainability Plan (ESP) on the performance of the Nigerian economy as a national economic resilient policy in the post COVID-19 era within the framework of a macro-econometric model. The study is hinged on the Keynesian general theory of employment, income and interest. Annual time series data spanning from 1970 to 2019 for within sample forecast, and a six-year out-of-sample forecast spanning from 2020 to 2025 were used. The policy scenario of 21.3 percent increase in government expenditure under the ESP as a stimulus package was simulated and the findings showed that increase in government expenditure under the ESP in critical areas would bring about significant impact on the macroeconomic performance of the Nigerian economy, especially on employment, inflation, economic growth and balance of payment in the post COVID-19 era. Emergent from these findings, the study recommended among others that the government should mobilize resources to finance the ESP in order to stimulate the economy in the post COVID-19 era by ensuring prudential fiscal management of resources; and the Central Bank of Nigeria (CBN) should ensure that financial institutions saddled with the responsibility of disbursement of intervention funds reduce interest rate from 9 percent to 5 percent as reflected in the ESP.

Маркетинговые исследования национального рынка противоэпилептических препаратов

Introduction. The anticonvulsant drug range expansion, the change in the treatment strategies, and person-oriented approach to choosing the optimal drug dictates the need for marketing research to update and systematize data on the state of the national pharmaceutical market of anticonvulsants. Carrying out a marketing analysis of the antiepileptic drugs (AEDs) market, including determining the market situation and the qualitative characteristics of this group of drugs, is necessary to prescribe optimal and rational pharmacotherapy regimens for patients with epilepsy, as well as to meet the demand and needs of consumers. Aim. To perform an analysis of the national market of AEDs and determine its main parameters and development trends. Materials and methods. The methodology for research of the AEDs market included methods of content-analysis and ATC/DDD methodology, structural-logical, graphic-analytical, and statistical methods of analysis. The objects of content analysis were: the State Register of Medicines; the unified structured directory-catalog of medicines; Internet sites; price-lists of the main distributors of medicines. The objects of the study were the sales data on AEDs in the Russian Federation for 2020 provided by the IQVIA agency (IMS Health). Results. An analysis of the AED range in the Russian market showed sufficient assortment saturation of AEDs of the 1st and 2nd generations, and an insufficient number of the latest AEDs. It has been established that the largest share (50%) of the AEDs in the home pharmaceutical market is represented by Russian manufacturers. At the same time, India makes the maximum contribution to the structure of imports (11%). In 2020, the leading positions in consumption continued to be held by valproates (36%) and carbamazepine (27%), however, the AEDs’ consumption structure has been changing in recent years, the share of the newest anticonvulsants was 13% in physical terms (in volume) and 23% in monetary terms (in values), respectively, an increase in the cost of the newest anticonvulsants amounted to 19%. Conclusion. The growth driver of the AED market is the subsidized segment. The growth of public antiepileptic therapy spending, despite the entry of ever cheaper generic drugs, was provided by medicines of the new and newest generations, the price of which differs up to a hundred times from traditional AEDs. The revealed dynamics of sales of AEDs, the social orientation of the policy of the Russian state, and the legal norms for subsidized drug provision of patients with epilepsy with all drugs, suggest a further increase in government expenditures on AEDs in the coming years.

INTERNATIONAL TRADE, CONSUMER PROTECTION AND PUBLIC HEALTH IN NIGERIA: AN EMPIRICAL ANALYSIS

The paper empirically examines the nexus between foreign trade, consumer protection and public health in Nigeria, using annual time series data from 1981 to 2021. Cointegration and dynamic error correction modelling techniques were utilized in the analysis. The empirical findings show that foreign trade policy has a positive and significant effect on public health in Nigeria. Consumer protection (proxied by consumer protection dummy) and per capita income are both positively related to public health, although the effects are weak, attributable to the low level of consumer protection and awareness, in addition to the low level of per capital income that fuels income and wealth disparity, with the effect of reducing health outcomes in Nigeria. Public expenditure on health and inflation rate (proxy for macroeconomic policy environment) are negatively and significantly related to public health outcomes in Nigeria. Based on these findings, it is recommended that appropriate consumer protection awareness on public health concerns through greater level of public campaigns on the dangerous effects of imported fake, substandard and illicit goods that are inimical to public health be aggressively launched. Increase government expenditure on health institutions, as well as judicious and efficient deployment of public and private resources to the health sector is also important to enhancing health outcomes in Nigeria. A strong institutional and regulatory environment to curtail illicit and nefarious importation of fake and substandard goods, particularly pharmaceuticals and food into the country is important, in addition to a sound and stable macroeconomic environment that is capable of promoting the public health status of the citizenry in Nigeria.