Increase In Government Expenditure Research Articles

Improving the Efficiency of the Russian Budgetary Policy in the Context of Economic Growth Fueling

In modern life, the budgetary policy is a crucial tool for financial regulation of the Russian economic development from the standpoint of ensuring stable growth rates. The importance of the budgetary policy for the sustainable economic development is determined by the following factors: first, at the macroeconomic level it helps to achieve macroeconomic stability (a necessary condition for economic growth); second, at the microlevel it stimulates investment, accumulation of human capital and the increase in factor productivity. The state influences the economic growth rates and quality through productive expenditures as one of the most important components of aggregate demand.The subject of the researchis the impact of productive government expenditures on the economic growth rates in the Russian Federation at the stages of crisis and post-crisis development of the national economy (2008–2016).The purpose of the researchwas to assess the budgetary policy of the Russian Federation in the context of boosting the economic growth and to develop proposals to increase its efficiency. The paper examines the existing theoretical approaches to assessment of the impact of government expenditures on the economic development. The authors also used statistical data to measure the interrelationship between budgetary investments in science, basic and human capital and the GDP volumes. The authors formulated recommendations on improving the efficiency of the Russian budgetary policy, in particular: identifying priorities for budget fund expenditures; changing the existing structure of government spending; expanding the scope of the public-private partnership to promote investment and innovation activities. The paperconcludesthat the lack of medium- and long-term reserves for increasing government expenditures necessitates the change in the structure of government spending through reducing overheads and increasing production costs with the purpose of ensuring sustainable economic growth.

Globalisation and Food Sovereignty: Impact of Foreign Direct Investments and Government Expenditure in Ghana in 2001-2010

The article looks at the globalisation effects on food availability in Ghana. The aim of the article is to analyse which of the selected macroeconomic indicators have a statistically significant impact on the increase of food availability in the country. Impacts of foreign direct investments on agriculture and government expenditures in agriculture have been tested. Correlation analyses and multiple regression analyses have been used to analyse the test results. Findings suggest that change in both foreign direct investments in agriculture and government expenditures in agriculture cause significant change in food availability in Ghana. At the same time, the impact of government expenditures on the amount of available food is in the case of Ghana more than two‑times higher than the impact of agricultural foreign direct investments, while the increase in government expenditures in agriculture does not cause a decrease in foreign direct investments in agriculture.

The Effect of Government Expenditure on Fiscal Deficits in Kenya

In many economies world over, accountability and transparency as well as fiscal discipline in public expenditures take priority as the main catalysts to economic growth. However, large fiscal deficits have been reported in most developing countries which lead to inflation and currency devaluations. In this case, Kenyan government is no exception as its expenditures are consistently way above its revenues. This study therefore attempted to assess the relationship between government expenditure and fiscal deficit in Kenya. This study used a causal research design. Secondary data was obtained from the financial records of National Bureau of Statistics, The Economic Surveys, Kenya Institute of Policy Analysis and Research (KIPRA) and the Institute of Policy Analysis and Research (IPAR) ranging from year 2004/05 to 2010/11. Regression model was used to estimate the effect of government expenditure on fiscal deficits. The study established that a unit increase in government expenditure, increases fiscal deficit of GDP. The study recommends that the government of Kenya should come up with strong working policy to regulate the expenditure of its resources.

Testing the predictive ability of house price bubbles for macroeconomic performance: A meta-analytic approach

This paper tests for the predictive ability of bubbles in housing markets on several proxies of macroeconomic performance using a panel of eighteen advanced countries. We use robust inference methods to address the bias resulting from the unknown persistence of our house price bubble measure. Evidence of predictability is analyzed by using a meta-analytic p-value combination approach for an overall joint significance, a method that is rarely applied in the panel predictive regression framework. The advantages are that heterogeneous panels are accommodated, and one can make inference on the individual unit for which the null hypothesis of no predictability is rejected. Our findings reveal the following: First, house price bubbles consistently predict an increase in government expenditures, even in the presence of structural change, different testing horizons and sample periods, as well as the inclusion of credit bubbles as as an additional predictor. Second, we find greater evidence that house price bubbles enhance macroeconomic performance in the identified countries for which evidence of predictability exists.

Deficit Financing in Contemporary Economies: Effects and Implications

Ann Pettifor’s paper on deficit financing elucidates how Keynesian policies in times of economic slumps reduce public deficits. A public misconception is that during economic downturns, increasing government expenditure will worsen the deficit. Deficit financing aims to increase economic output via creating/salvaging jobs and increasing productivity. Thus, the temporary increase in spending creates a longterm increase in economic output, so the size of the deficit in relation to GDP ultimately decreases. However, effective targeting of government expenditure is critical if it is to benefit the economy. Evidence from the United States, Taiwan, and Bangladesh, shows how deficit financing used effectively, and not solely to gain political capital, is necessary to produce economic growth.

How Expansion Of Public Services Affects The Poor:, Benefit Incidence Analysis For Gadarif State From Sudan

The study investigates whether the poor benefit more or less than the non-poor from an expansion in public services program in Gedarif State from eastern Sudan; and how government expenditure affects the welfare of different groups of people or individual households at the local level?. Using household survey data carried out in 2009; a sample of 40 clusters from the state was selected with 25 households from each selected cluster. The study followed the recommended standard World Bank methodologies by adopting a benefit incidence analysis techniques and tools to assess the impact of the water, electricity and health program on poverty and income distribution of population to identify the currant beneficiaries and the marginal benefit from increasing government expenditure, based on the geographical variation of localities in the state. A model proposed suggests that, an expansion of water and health programs would be decidedly pro-poor, while an expansion of electricity program would be pro-rich. Water and health programs displayed strong pro-poor and have a greater role for decreasing inequality and poverty in Gadarif State. This maximization appears to occur without policymakers taking into account distributional weights in their implicit social welfare function.

Escalating food security status in Gujrat State of India

By using district-level secondary data, 2016 and indicator approach, the present study has developed a food security index for the districts associated with the State of Gujarat, India. The calculated FSI revealed that Ahmadabad district has the highest food security status, whereas Porbandar district has the lowest food security status. The estimated results show that there exists a significant food inequality across districts due to variation in socioeconomic variables. The study suggests that (i) creation of more job opportunities in non-farm would be critical to improve accessibility power of people to acquire food, (ii) food security would be sustainable as increase government expenditure in agriculture and rural development, public spending in agriculture and R &D, development of infrastructure and food-grain storage, and credit flow in the market (iii), and the government of India is required to adopt an effective mechanism to reduce marketing in order to control food price inflation.

The Impact of CO2 Gas Emissions on Government Expenditure of Health Sector in Indonesia

Improving the degree of public health is increase government expenditure on the health sector. The study aims to analyse environmental degradation, demographic and economic factors on government expenditure in health. The analytical tools used in this study are multiple regression. The results showed that increased government spending on the health sector caused by demographic factors that are increasing the number of elderly people and environmental factors, namely CO2 gas emissions.

A test of Wagner’s hypothesis for the Ghanaian economy

The economy of Ghana profiles a trajectory of increasing government expenditure at the backdrop of an inconsistent growth in real GDP. Thus, this study explores the causal relationship between real economic growth and real government expenditure in Ghana between the period 1960 to 2017. The Johansen (1991, 1995) cointegration method, the Autoregressive Distributed Lag bounds test approach and the Toda-Yamamoto non-Granger causality test are employed in this study. The findings are that the variables are cointegrated, and there is no Granger causality from real economic growth to real government expenditure. In effect, the causality shows that the Wagner’s hypothesis does not hold in the case of the Ghanaian economy and that the Keynesian theoretical standpoint that public expenditure is an exogenous factor is not deflated in this case.

COMPLIANCE OF MICRO SMALL MEDIUM ENTERPRISE TAX PAYERS TO GROSS REGIONAL DOMESTIC PRODUCT

Increasing the number of Micro Small and Medium Enterprise local government of Bandung is a potential source of income from the local tax sector to increase development an economic city of Bandung. This research is to describe the role of tax payer compliance rate on Micro Small and Medium Enterprise to increase the Gross Regional Domestic Product as measured by the increase government expenditures of finance development of Bandung city during period 2013 – 2016. The method of study is descriptive verificatif by using the analytical tool Two Stage Least Square. The result of the analysis indicates that compliance of micro enterprise tax payers will impact to increase the gross regional domestic product through the increased government expenditures sourced from local tax revenues.

Addressing the sustainable development through sustainable procurement: What factors resist the implementation of sustainable procurement in Pakistan?

Sustainable Public Procurement is an integral part of sustainable development because of ever increasing government expenditures. Most of the developing countries lack the required infrastructure which may support public sector sustainability. The aim of this study is to assess the critical factors which resist the implementation of sustainable procurement in public sector of Pakistan. We used Interpretive Structural Model to investigate and rank the interrelationships among different factors of sustainable procurement. With the help of literature and Likert scale instrument, we found twelve key barriers that resist sustainable procurement implementation. We also examined tender documents of 75 different public sector universities of Pakistan but found absence of sustainability element in the documents. External factors namely government legislation and stakeholders' pressure are found most critical barriers as compared to inter organizational factors. The study is also important to highlight the hurdles in the way of sustainable development. First, the government must introduce rules and regulations to implement the sustainable procurement. Stakeholders and donors must put pressure on organizations for adopting sustainable procurement. Sustainability education should be made mandatory part of curriculum and employees should be given regular training on sustainability. Further, public procurement policies at government and institutional levels are required to be revisited towards a circular economy.

Disaster Impact, National Aid, and Economic Growth: Evidence from the 2008 Wenchuan Earthquake

How disasters have affected economic growth has often been a subject for economic debate, and empirical studies of the experience in China are clearly inadequate. Using the panel data from 181 county-level cities in Sichuan province from 2003 to 2013, this paper investigates the direct and dynamic effects of the Wenchuan earthquake disaster on economic growth, as well as how national rescue affected postdisaster economic recovery. The econometric results show that earthquakes significantly reduce real GDP in the affected areas after controlling for the national rescue variables, and this negative effect exists in the affected area over a long time. In addition, our empirical findings suggest that the postdisaster national rescue can promote economic recovery in the affected areas by increasing government expenditure, improving traffic conditions, and enhancing the urbanization process and the level of industrialization. Besides, state financial aid has no obvious effect on the development of tertiary industries and the accumulation of human capital in affected areas. These results were found to be robust after applying several approaches to alleviate the potential endogeneity problem. Findings in this study carry several important policy implications. As well as providing national rescue to promote postdisaster reconstruction, the government should also develop policies that will provide direct aid funding to tertiary industries and boost postdisaster economic reconstruction and human capital accumulation, thus improving the efficiency of relief funding and reducing the long-term adverse effects of the disaster on economic growth.

EDUCATION, HEALTH, AND PUBLIC SERVICE IN INDONESIA: AN ISLAMIC ECONOMICS VIEW

The main object in this paper are two. First, to determine the suitability of laws on education and health to the government expenditure of Indonesia in Islamic economics view. Second, to devise guidelines for national policymakers in the implementation of government expenditure in education and health which gives utmost priority to public service. The distinctive feature of this paper is not only to see the increasing government expenditure and public services but in additional to implement the maximum government expenditure in education and health, there needs to be a minimum standard service which we see not only from the laws but from Islamic economics too. This paper contains as follow: section 1 commences with the sneak peak of Islamic economics, the increasing of government expenditure phenomenon, and empirical study about health and education. Section 2 addresses the state expenditure in Islam, the definition of government expenditure according to law, quality of services in Islam, and the definition of public services. Section 3 discusses education and health expenditure according to law and the minimum service standard for both and last, Section 4 is the conclusion.

OIL REVENUE AND STATE BUDGET DYNAMIC RELATIONSHIP: EVIDENCE FROM BAHRAIN

The main purpose of the study is to investigate the short run and long run relationship between government revenues and government expenditures in Bahrain over the period from 1990 to 2017. Using annual data and time series analysis, the study indicated that the above two variables, government revenues and government expenditures were integrated of order one when both Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) unit root tests were applied. The empirical results have revealed that unidirectional causality runs from government revenues to government expenditures. Thus, there is evidence in support of “revenue-spend” hypothesis. Finally, the results revealed that a 1% increase in oil revenue induces an increase in government expenditures by 1.37%. Therefore, policymakers in Bahrain should focus to further diversify the sources of government revenues from non-oil sectors in such a way that the country will be immune to vulnerability, especially when world oil market performs poorly.Keywords: Oil revenues, Cointegration, Government expenditures, Government revenues, Granger causality, Bahrain.JEL Classifications: E62, H20, H30, C30, C40, C51DOI: https://doi.org/10.32479/ijeep.6991

Propagation Mechanisms for Government Spending Shocks: A Bayesian Comparison

AbstractThe inability of a simple real business cycle model to predict a rise in consumption in response to increased government expenditures, observed in many empirical studies, has stimulated the development of alternative theories of government spending shocks. Using the Bayesian approach, we evaluate the quantitative performance of five extant models, and find that neither of the considered transmission mechanisms for government spending helps improve the fit of the baseline model. Moreover, we find that consumption decreases in all estimated models in response to a rise in government spending.

China’s Fiscal Multiplier and Its State Dependence

This paper studies the effects of government spending on China’s output with a threshold structural vector autoregressive model. The empirical findings suggest that increasing government expenditure significantly raises China’s aggregate output. Contrary to the evidence of countercyclical fiscal multipliers in the advanced economies, China’s fiscal multiplier tends to be procyclical, suggesting a novel fiscal policy transmission mechanism in China.

Implications of Forced Migration on Demographics, Labor Market, and Welfare

The seven years of the civil war in Syria has led to thousands of deaths and the flight of a quarter of the pre-war population from their homeland. This paper focuses on the effects of 3.5 million displaced Syrians on the Turkish economy via an intertemporal CGE analysis. The results highlight adverse labor market outcomes for natives and support similar findings in the related literature. On the other hand, due to increasing government expenditure intended to provide essential humanitarian services to incoming Syrians, the picture changes remarkably. Declining informal employment, lower inflation, and positive economic growth are favorable outcomes. These are traded-off against worsening the most vulnerable household groups' shares in total disposable income. Moreover, if some of the Syrians are formally employed, the economic growth and employment generation are getting stronger at the expense of even worsened size distribution of income.

Healthcare expenditure and GDP in Ethiopia from 1995 to 2014: a time-series analysis

BackgroundWith an increasing attention from researchers, policymakers, and the priority of healthcare aspects, explaining the relationship between healthcare expenditure (HCE) and gross domestic product (GDP) is of great importance to the academics in particular and government policymakers in general. Thus, this study aimed at investigating whether HCE and GDP have a long-term relationship and at measuring the elasticity of HC from 1995 to 2014.MethodsThis study used yearly HCE and GDP data of Ethiopia during the period 1995–2014. Line graph was used to visualize the trend. Augmented Dickey–Fuller and Johansen cointegration tests were carried out to check stationarity and the long-run equilibrium relationship between the variables, respectively. We also examined the elasticity of healthcare expenditure using ordinary least squares, least absolute deviations, least mean squares, and M-estimator estimation approach.ResultsThe results confirm that there was a significant long-run relationship between the variables. In addition, the results of this study based on the four estimation approaches show that increasing GDP has a significant and positive impact on healthcare expenditure. The income elasticity of total and government healthcare expenditure was less than one nearly 0.05 and 0.028%, respectively.ConclusionsThe results of this study, therefore, suggest that HCE and GDP have a long-term cointegration and that health expenditures were a necessity in Ethiopia. This study finally suggests for government in general and Ministry of Health and the Ministry of Finance in specific to continue on their effort to increase healthcare expenditure not only by increasing government expenditure but also by enabling private health expenditure in healthcare coverage.

Domestic Debt and Economic Growth in Tanzania

The main objective of this paper was to examine the impact of domestic debt on economic growth in Tanzania for the period 1990 to 2015 using Ordinary Least Square (OLS) regression method to estimate the effects. The study finds that there is an inverse but insignificant relationship between domestic debt and the economic growth of Tanzania as measured by GDP annual growth. The inverse relationship between domestic debt and GDP may be caused by different factors such as; increased trend in domestic borrowing, government lenders’ profile dominated by commercial banks and non-bank financial institutions which promotes the “crowding out” effect; the nature of the instruments used by the government ; the improper use of the domestic borrowed funds which may include funding budgetary deficits, paying up principal and matured obligations on debt, developing financial markets as well as fund other government operations.
 Other control variables relate with the GDP as predicted. For example, Inflation (INF) has a negative effect on the GDP growth rate, but the relationship is not statistically significant, while gross capital formation (GCF) has a positive statistically significant effect on GDP growth rate. Furthermore, foreign direct investment (FDI) showed a positive effect on the GDP growth rate and export (X) has a positive effect on GDP growth rate, and the relationship is statistically significant explaining that if a country applied an export-led growth economic strategy it enjoys the gains of participating in the world market. This means that an increase in export stimulates demand for goods which leads to increase in output, and as a country’s output increases, the economic performance also takes a similar trend. Finally, government expenditure (GE) had a negative effect on the GDP growth rate which may be explained by the increased government expenditures which are funded by either tax or borrowing.
 Therefore, what is required for countries like Tanzania is to have better debt management strategies as well as prudential financial management while maintaining to remain within the internationally acceptable debt level of 45% of GDP and maintain a GDP growth rate of not less than 5%. It is important for the country to realize from where to borrow from, the tenure, the risks involved and limitations to borrowing and thus set the right balance of combination of both kinds of debt. Another requirement is to properly utilize the borrowed funds. The central government’s objective should be to use the funds in more development-oriented projects that bring positive returns to the economic development. The government should not only create a right environment and policies for investment to attract investment from domestic and foreign sources but also be cautious about the kind of investments that the foreign investors make.

How to Achieve the Take-off into Sustained Growth: A Case Study for Slovenia

In this paper, we show that successful policy aimed at enhancing economic growth in the long run must be based on policies which improve human capital and technological progress. This is applied to Slovenia, a small open economy in the European Union and the Euro Area. In particular, we investigate how fiscal policies should be designed to support economic growth without violating the European Union Stability and Growth Pact. Using the SLOPOL10 model, an econometric model of the Slovenian economy, we analyse the effects of different fiscal policies in Slovenia over the next few years by means of simulations. The fiscal policy multipliers of the Slovenian economy are small and short-lived, which renders demand-side expansionary fiscal policies inappropriate as a means of achieving higher growth. However, if an increase in government expenditures directly related to technological progress is implemented (such as better funding for tertiary education or subsidies for firms’ investments in research and development), this can trigger a path of output which is permanently higher than that of the baseline simulation. Reducing income taxes and social security contributions has strong positive effects on employment. This result shows that the key to prosperity and sustained growth is investment in human capital and technology, also for a small open economy like Slovenia.