Level Of Public Spending Research Articles

Differential financing of public health facilities

The health systems in India suffer from low level of public spending and high out of pocket payment. Public health facilities are funded on a fixed and uniform basis irrespective of their needs and performance. The National Rural Health Mission has introduced an innovative approach of flexible financing to public health facilities under Untied Funds (UF), Annual Maintenance Grant (AMG) and Aarogya Raksha Samithi Corpus Funds (ARS) @ of Rs.10000 at Village Health and Sanitation Committee (VHSC), Rs.20000 at Sub-centre (SC), Rs.175000 at Primary Health Centre (PHC), Rs.250000 at Community Health Centre (CHC) and Rs.500000 at District Hospital (DH) Though funds are provided to healthcare facilities with adequate guidelines and flexibility, utilization is poor. Given the limited resource available for healthcare in the country, there is a need to rationalize the distribution of funds and allocate them efficiently. With an objective to work out a differential financing model for public health facilities, a cross sectional study of 46 primary and secondary level facilities was conducted in two districts of Karnataka in the year 2011-12. Retrospective data on resources, finance and performance of 2008-09, 2009-10 and 2010-11 were collected and the members of ARS committee responsible for taking decision on spending were interviewed. The study found that utilization at health facilities are influenced by per-capita allocation, distance from district headquarter, availability of equipments and infrastructure. There is no definite trend of impact of availability of human-resource, number of beds, staff residing at the facility compound, training, cooperation among members, availability of guidelines on utilisation of funds at health facilities. The study proposes formula for allocating funds on differential financing method: VHSC @ Rs.10 per-capita, SC @ Rs.4 per-capita, PHC @ Rs.6 per-capita, CHC @ Rs.1.04 per-capita and @ Rs.4167 per functional bed and DH @ current norm of 500000 per DH.

Does regionalization of local public health services influence public spending levels and allocative efficiency?

This paper uses a panel data set of Connecticut communities to offer several empirical insights into the economics of local public health services. First, the demand characteristics associated with local public health services are explored. Tax-share, income, and aid elasticities of local public health demand and the congestability of local public health services are estimated and compared to similar estimates for local public education and municipal services. Second, local and regional demands for public health services are compared with respect to their underlying characteristics and spending levels. Third, Brueckner's test is conducted to determine if resources are efficiently allocated to local public health services in communities with an independent health department and those participating in a regional health district. Empirical evidence reveals that the demand for local public health services is inelastic with respect to tax share, unrelated to income, and relatively sensitive to intergovernmental aid. Moreover, regionalization appears to increase spending on public health services especially relative to both municipal and local education services. Finally, regional health departments serving large populations appear to overspend on local public health services.

An Empirical Analysis on the Relationship between Public Sector Size and Economic Growth in Turkey

Armey Curve, propounded by Richard Armey, is one of the tools that developed to demonstrate the role of the state in the economic process. The basic logic behind the Armey Curve is that the relationship between public spending and gross domestic product (GDP) is positive up to a certain point, thereafter the relationship becomes negative. According to Friedman (1997), the government has an important role in a free and open society. It is emphasized that, average contribution of the public sector in the economy is positive, but as the public share of national income increases from 15% to 50% the marginal contribution of the public sector will be negative. Therefore, Friedman advocates that based on development level of countries, the optimal level of public spending should be between 15% and 50%. In this article, Friedman’s hypothesis is tested for Turkish economy using the data of the period 1975-2010 by the help of econometric timeseries analysis, and Armey Curve is evaluated whether it is valid for total public expenditure and expenditure components or not. Empirical findings confirmed that there is a relationship as inverse U between economic growth and other expenditure components except public investment expenditure. Moreover, the optimal level of total public expenditure for Turkish economy is calculated as 16% of GDP. This ratio is below the level of 26.6% which is the ratio of 2010 public expenditure to GDP. In this case, one of the macroeconomic policy proposals can be the reduction of the public expenditures in Turkish economy.

Show Me the Money! Neoliberalism at Work in Education

Neoliberalism is often addressed by commentators and critics as a set of ideas or a doctrine. This article considers neoliberalism as a set of financial practices and exchanges --about money and profit --goes on to suggest that as practitioners, researchers, activists we need to understand and engage with that logic and its mechanisms. Examples are given of the role of money in all aspects of education policy and education reform. The unstated and usually unexamined subtext of neoliberalism is not doctrine but money, particularly and crucially in the form of profit. Of course, states are also about money. Policies cost money, and that money must come from somewhere, and one of the responses of states around the world to the 2008 financial crisis has been to make 'cuts' in public spending and to look for ways of doing policy cheaper -- - marketisation and privatisation are taken to be one way of doing policy cheaper, as well as more effectively. 'The expansion of market relations allows, in theory, a lower level of public spending, and therefore a lower level of taxation' (Connell et al, 2009, p. 332). However, in most education policy research money is rarely mentioned and is overwritten by a focus on ideas and practices. Even when subjected to the arcane mercies of the economics of education, issues of funding are dealt with as abstractions. However, in the interface between education policy and neoliberalism money is everywhere. Policy itself is now bought and sold, it is a commodity and a profit opportunity, and there is a growing global market in policy ideas. Policy work is also increasingly being out-sourced to profit-making organisations, which bring their skills, discourses and sensibilities to the policy table, for an hourly rate or on contract to the state.

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Quantifying the impact of economic crises on infant mortality in advanced economies

Policy makers rely on a mix of government spending and tax cuts to address the imbalances in the economy during an economic crisis, by promoting price stability and renewed economic growth. However, little discussion appears to focus explicitly on quantifying the cost of economic crises in terms of human lives, especially the lives of the most vulnerable members of society, infants. Using a statistical approach that is robust to the increases of mortality in outlying years, we quantify the effect that economic crises, periods of prolonged economic recession, have on infant mortality. Moreover, we investigate whether different levels of public spending on health across advanced industrialized democracies can mitigate the impact of crises on infant mortality. We find that economic crises are extremely costly and lead to a more than proportional increase in infant mortality in the short-run. Substantial public spending on health is required in order to limit their impact.

Public education and redistribution when talents are mismatched

In democratic countries, elected policymakers determine public spending. The level of public spending depends on taxes that are decided by a voting mechanism. Policymakers also decide how to allocate funds among different policies, such as public education and pure redistributive transfers. How are the levels of funding for public education and redistribution determined in the political process? What impacts do votes on these two policies have on inequality, growth and social mobility? We develop a politico-economic model that highlights a novel mechanism: public education provides opportunities for the children of the poor to be recognized for their talent. This reduces the probability of a mismatch, which takes place when individuals with low talent who come from rich families find jobs that should go to people with high talent (and vice versa). Hence, the poor may prefer public spending on education to direct redistribution, while the rich prefer redistribution, as education implies more competition for good jobs from the poor.

Tax morale and public spending inefficiency

Tax evasion is a widespread phenomenon and encouraging tax compliance is an important and debated policy issue. Many studies have shown that tax cheating has to be attributed to a considerable extent to the tax morale of taxpayers. The aim of the present paper is to shed light on the relationship between the taxpayer and the public sector; specifically, we investigate whether public spending inefficiency shapes individual tax morale. Combining data from Italian municipalities’ balance sheets with individual data from a properly designed survey on tax morale, we find that the attitude towards paying taxes is better when resources are spent more efficiently. This evidence seems not to be driven by some confounding factor at the municipality level or by spatial sorting of citizens and proves robust to accounting for alternative measures of both inefficiency and tax morale. We also find that the negative effect of inefficiency is larger if the level of public spending is lower and/or the degree of fiscal autonomy is higher.

Response to Henrik Selin's review ofGoverning the Tap: Special District Governance and the New Local Politics of Water

In his careful and generous review of my book, Henrik Selin asks why I selected responsiveness and intergovernmental coordination as dependent variables for my analysis, therefore setting aside other policy effects that special district governance might produce. This is an important question: the delegation of policy authority to autonomous, specialized governments is a significant departure from the normal politics that takes place in a multidimensional legislature and could have a variety of consequences. To the extent that special districts have received any scholarly attention, it has focused mostly on estimating how specialization affects the level of public spending. My interest lies more in the quality of governance. What do we want from representative government? Central among our goals should be policy outcomes that are responsive both to public preferences and to public problems.

Justice Reinvestment: Can it Deliver More for Less?

Recent years have seen high levels of public spending on criminal justice but to relatively little effect. Prison numbers have risen sharply and public confidence in the criminal justice system remains relatively low. Although crime has fallen there is limited evidence to suggest that this is because of increased criminal justice activity. Justice reinvestment (JR) is a concept that has been widely touted as an approach that might help UK authorities deliver ‘more for less’ at a time when public sector spending is being cut. It has been used widely in the USA with seemingly promising results. Although elements of JR have been tried in the UK, a full-scale implementation has yet to be attempted. Such an attempt will have to give careful consideration to a variety of practical implementation challenges and methodological issues which range from the potential unification and devolution of criminal justice budgets, to the transferability of a predominantly USA-originating evidence base to the UK. This article identifies a number of such issues and attempts to set out an agenda for academic discourse on JR.

Public Spending, Public Deficits and Government Coalitions

This study examines the relationship between types of government and level of public spending. There are two competing perspectives about the consequences of coalition governments for the size of public expenditures. The most common argument is that government spending increases under coalition governments, compared with one-party governments. Another line of thought contends that coalition governments are often stalled in the status quo due to the veto power of each member. Our analysis of public spending in 33 parliamentary democracies between 1972 and 2000 confirms the latter argument that coalition governments have a status quo bias. We find, particularly, that single-party governments are apt to modify the budget according to the current fiscal condition, which enables them to increase or decrease spending more flexibly. By contrast, coalition governments find it difficult not only to decrease spending under difficult fiscal conditions but also to increase it even under a more favorable context, because each member of the coalition has a veto power.

Does Public Policy Matter for Labor Productivity Growth?: A Political-Economic Analysis of Productivity Effects of Policy in OECD Countries

Labor productivity - output per hour worked - is an important factor determining the wealth of national economies and their standards of living. Its growth accounts for about half of per capita GDP growth in OECD countries. Despite its importance, it has received scant attention in political science. This paper seeks to fill a gap in the study of the productivity effects of government policy. I provide an explanation from the perspective of human capital investments, where governments can help promote human capital investments by individuals (1) by reducing the costs of investments and thereby increasing their net benefits by using public education, redistribution, welfare, and labor market policy and (2) by creating a social environment (with policies and institutions) where human capital investments pay and individuals believe it. The main empirical findings are the following. Family support policy boosts productivity growth. So does public education, particularly university education. However, at least when measured by public spending levels, active labor market policy (ALMP) suppresses productivity growth. The nature and quality of ALMP may matter more than spending. Meanwhile, although market poverty and income inequality are found to reduce productivity growth and thus redistribution would be expected to promote it, pro-productivity effects of redistribution are not detected, when it is measured simply as reductions in poverty and inequality after taxes/transfers. Redistribution through the provision of public services such as family support and education may be better for productivity growth. Finally, social democratic governments facilitate productivity growth, over and above the effects of their hallmark policy and institutional variables.

The Brazilian national health system: an unfulfilled promise?

In 1988, Brazil became one of the first countries in Latin America to frame access to health care as a constitutional right. However, it would be misleading to call Brazil's Unified Health System (Sistema Único de Saúde, or SUS) a public health system that provides universal access and comprehensive care. This paper reveals a strong contradiction between the re-distribution model set out in the Brazilian Constitution and the inadequate level of public spending on health care. The law states that health care is a basic social right, allocated by need rather than means. Meanwhile, in 2003, Brazil spent US$ 597 per capita on health, or 7.6 per cent of its gross domestic product (GDP), while the average country from the Organization for Economic Cooperation and Development (OECD) spent US$ 3145, or 10.8 per cent, and Argentina spent US$ 1067, or 8.9 per cent of its GDP.

Trends in the Distribution of Health Care Financing Across Developed Countries: The Role of Political Economy of States

Since the 1980s, major health care reforms in many countries have focused on redefining the boundaries of government through increasing emphasis on private sources of finance and delivery of health care. Apart from managerial and financial choices, the reliance on private sources reflects the political character of a country. This article explores whether the public-private mix of health care financing differs according to political traditions in a sample of 18 industrialized countries, analyzing a 30-year period. The results indicate that despite common trends in all four political traditions during the study period, the overall levels of expenditure and the rates of growth in public and private expenditures were different. Christian democratic countries had public expenditure levels as high as those in social democracies, but high levels of private expenditure differentiated them from the social democracies. Christian democratic countries also relied on both private insurance and out-of-pocket payments, while private insurance expenditures were very limited in social democratic countries. The level of public spending increased at much higher rates among ex-authoritarian countries over the 30 years, bringing these countries to the level of liberal countries by 2000.

The 18-month well-baby visit: A commentary

The 18-month well-baby visit: A commentary

Varieties of Residential Capitalism in the International Political Economy: Old Welfare States and the New Politics of Housing

Comparative and international political economy (CPE and IPE) are justifiably obsessed with finance as a source of power and as a key causal force for domestic and international economic outcomes. Yet both CPE and IPE ignore the single largest asset in people's everyday lives and one of the biggest financial assets in most economies: residential property and its associated mortgage debt. This special issue argues that residential housing and housing finance systems have important causal consequences for political behavior, social stability, the structure of welfare states, and macro-economic outcomes. The articles examine specific instances across a range of countries. This introduction has broader aims. First, it shows that housing finance systems are not politically neutral. We argue that the kind of housing people occupy and the property rights surrounding housing can constitute political subjectivities and objective preferences not only about the level of public spending, but also the level and nature of inflation and taxation. Second, like the varieties of capitalism literature, we show that housing finance systems also have important complementarities with the larger economy. But we diverge from the varieties literature, suggesting that ‘varieties of residential capitalism’ are not explained by domestic institutional complementarities alone. Rather, what we refer to as financially repressed and financially liberal systems are globally interdependent. While welfare and taxation systems show high degrees of path dependence, transnational trends in the deregulation of housing finance have altered incentives and preferences for financial institutions, home owners, and would-be home owners. Finally, the introduction offers some speculation about how pocketbooks will drive politics as the global housing busts tightens mortgage belts around the waists of average Organization for Economic Cooperation and Development home owners.

Effects of Electoral Rules, Political Competition and Corruption on the Size and Composition of Government Consumption Spending: An Italian Regional Analysis

Abstract This paper analyses how proportionality of the electoral system, political competition and corruption affect the total amount of Italian regional public consumption expenditure and alter the public budget structure. The Italian case is particular: from 1993 the country underwent a change in the electoral system (from proportional to majoritarian) and, at the same time, a campaign was waged against the corruption of public bureaucrats. The aim of this work is to study the political determinants of public consumption spending, and more specifically the role played by political institutions (meaning electoral rules), the intensity of political competition in the "votes' market" and the corruption of public bureaucracy. We used panel data for 20 Italian regions from 1980 to 2003 in order to estimate a quantity effect and an allocation effect of the degree of proportionality of the electoral system, political competition and corruption of public bureaucracy on public consumption spending. The quantity effect of the proportionality of the electoral system and of the degree of political competition is positive; the same holds for corruption, meaning that corruption increases the total level of public spending. Analysis of the allocation effect shows that corruption, rather than the electoral system and political competition, alters the public budget structure towards social services and securities and general service sectors instead of education and health, leading to important policy implications.

Debate: Public spending levels for social care of older people: why we must call in the debt

Soon the Comprehensive Spending Review (CSR) settlement will be announced. At the time of writing, it is rumoured that everything is settled save for the two broad heads covered by the Department of Health: the National Health Service (NHS) and adult social care (LGA, 2007). For several years, it has been suggested that there will be little real increase in the allocation for councils with responsibility for social services (CSSRs) during the coming triennium, and perhaps for a long time thereafter.

“Grabbing Hand” or “Helping Hand”?: Corruption and the Economic Role of the State

This article seeks to disentangle which features of government intervention are linked to corruption and which are not, by distinguishing between the government roles of regulator, entrepreneur, and consumer. It finds that the degree of regulation of private business activity is the strongest predictor of corruption, and that high levels of public spending are related to low levels of corruption. There is no evidence of direct government involvement in production having any bearing on corruption. It is concluded that advanced welfare capitalist systems, which leave business relatively free from interference while intervening strongly in the distribution of wealth and the provision of key services, combine the most “virtuous” features of “big” and “small” government. This suggests that anti‐corruption campaigners should be relaxed about state intervention in the economy in general, but should specifically target corruption‐inducing regulatory systems.

The Health Care Financing Maze for Working-Age People with Disabilities

People with disabilities often require substantial medical services and supports to lead fulfilling lives. Health care expenditures for working-age people with disabilities are almost four times the expenditures of their counterparts without disabilities, about $8,300 per year in 2003, compared with $2,100 per year on average (Agency for Healthcare Research and Quality 2003). These expenditures are covered by variety of sources: private health insurance, Medicare, Medicaid, and wide variety of other public health care programs. In 2002, federal expenditures for the health care of people with disabilities totaled an estimated $102 billion, mostly under the Medicare and Medicaid programs ($93 billion); states paid an additional $45 billion (Goodman and Stapleton, 2005). Despite high level of public spending on medical care for working-age people with disabilities, the existing health care system is not adequately meeting the needs of this diverse population. Access to services is often determined by age, income, disability type, current work status and previous work experience, and many people face major gaps in needed services. The health care financing system is complicated by the fact that major financiers of health care for people with disabilities - primarily the states, the federal government, employers, and the individuals and their families - have, over the years, sought to reduce their own costs by shifting liabilities to each other. As the cost of health care has increased, so has the intensity of cost-shifting efforts. As result, the financing of health care for people with disabilities, especially long-term care, and other forms of chronic care services, resembles a multidimensional, temporally endless game of hot potato, in which beneficiaries and the services they need are regularly tossed from one set of hands to another - and often fall on the floor in the process (Vladeck, 2001). Making matters worse is the fact that access to financing is linked to work status. The public/private health insurance system can make it difficult for people with disabilities to move into and out of the labor market because most private coverage is obtained through employers and most public coverage is linked to determination of inability to work. Recent initiatives, most notably the Medicaid buy-in programs, authorized by the Balanced Budget Act of 1997 and the Ticket to Work and Work Incentives Improvement Act of 1999, have attempted to break the link between public health insurance eligibility and employment, but have had only moderate success and serve to further complicate the system (Goodman and Livermore, 2004). Much of the research on health care financing for people with disabilities has focused on the Medicaid and Medicare programs. The findings of this research often highlight the inadequacies of those programs in providing appropriate services to address the special needs of people with disabilities. A focus on these large programs, however, obscures the role of other public and private insurers, as well as the role of programs that provide many additional services to this population – all of which add complexity to the system. The purpose of this paper is to describe the financing system as whole, including the large public programs, other public and private insurers, and the many other programs that provide additional services. The description of the system highlights structural problems that need to be addressed in order to substantially improve the delivery of health and related services to people with disabilities. In the next section, we describe each source of health care financing for working-age people with disabilities and highlight its implications for service delivery and quality of life. In the concluding section, we describe the key structural shortcomings of the current financing system, assess the extent to which current reform efforts are addressing these shortcomings, and discuss the implications for broader efforts to reform health care financing system.