Local Expenditure Research Articles

EVALUATION OF THE CULTURAL SPHERE BUDGETARY FINANCING AT THE SUBNATIONAL LEVEL IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT IN UKRAINE

Abstract. Given the reform of state policy in the field of culture and the implementation of sustainable development strategy in Ukraine, there is a need to analyse the state of budgetary providing in this area in the regional context. The purpose is to determine the peculiarities of state budgeting of the cultural sphere at subnational level and to substantiate practical recommendations for improving its financing in the context of implementing the strategy of sustainable development of the Ukrainian economy. Such scientific and methodological tools as induction and deduction, comparison, synthesis, factor analysis by the method of principal components and econometric modelling are used. In 2003—2018, the tendencies of changes of local budgets expenditures on the sphere of culture in Ukraine are estimated. The author has determined that the dynamics of local budget expenditures on culture and art was fluctuating, but due to the implementation of the strategy of sustainable development «Ukraine — 2020» recorded weak positive changes in approaches to budgetary providing in this sphere at the regional level. A comparative analysis of the state of this sphere financing from local budgets in Ukraine and EU countries was carried out, it is identified that in our country the expenditures of local budgets on this sphere are lower than in these countries. The following scientific approach to the assessment of trends in budget funding for cultural sphere at the subnational level is proposed: specification of the main factors influencing the amount of local budget expenditures on culture and art by region; caring out factor analysis by the method of principal components for structuring factors and their ranking by regions; finding a sample regression function to determine the peculiarities of the influence of the studied factors on the expenditures of local budgets on culture and art in the regions of Ukraine. It is substantiated that the improvement of budgetary financing of cultural sphere of Ukraine at the subnational level is based on a clear definition of approaches to the allocation of budgetary resources to this sphere, related to strengthening the fiscal capacity of local budgets, measures concerning stimulation of business activity and improvement of socio-demographic situation. Keywords: cultural sphere, local budgets, subnational level, budgetary financing, sustainable development, factor analysis. JEL Classification С10, H72, O18, Z10 Formulas: 0; fig.: 1; tabl.: 4; bibl.: 19.

СТРАТЕГІЧНІ ПРІОРИТЕТИ БЮДЖЕТНОЇ ПОЛІТИКИ УКРАЇНИ В УМОВАХ ПАНДЕМІЇ COVID-19

Анотація. Глобальна пандемія COVID-19 оголила прогалини у сфері стійкості фінансових систем. Метою статті є оцінка адекватності стратегічних пріоритетів бюджетної політики України та її адаптивність до викликів глобального масштабу. У цих умовах значення держави і вироблення нових стратегічних пріоритетів бюджетної політики буде тільки посилюватись. Використовуючи місячні статистичні дані Державної казначейської служби України, Державної служби статистики і Міністерства фінансів України, із січня 2018 року до вересня 2020-го викладено гіпотезу про вплив боротьби з пандемією COVID-19 на величину грошових витрат Державного бюджету України, видатків на охорону здоров’я, економічну діяльність та на податкові надходження. Автори вважають, що боротьба з COVID-19 впливає на грошові витрати Державного бюджету України, а також на індекс споживчих цін та інші показники ефективності економіки в Україні. Крім того, на основі результатів регресу індекс споживчих цін є найбільш впливовим фактором грошових витрат Державного бюджету України. У той же час COVID-19 впливає на витрати на охорону здоров’я, але не впливає на витрати на економічну діяльність i видатки місцевого бюджету. Це означає, що головною метою економічної політики України є обмеження розповсюдження вірусу серед населення для недопущення зупинки економіки. Значна частина досліджень про стратегічні пріоритети бюджетної політики, їхнi зміни та ефективність дотримання в часи пандемії COVID-19 є відносно низькою. Попередні дослідження не використовували вплив унікальних на даний час екзогенних факторів глобального характеру. Дотримання пріоритетів бюджетного фінансування в умовах пандемії з урахуванням фаз її розвитку дозволить оцінити ефективність проведення бюджетної політики відповідно до наявних умов. Запропоновано основні стратегічні пріоритети бюджетної політики України в умовах COVID-19. Ключові слова: бюджетна політика, бюджетна стратегія, макропоказники, дефіцит бюджету, пандемія COVID-19. Формул: 0; рис.: 1; табл.: 4; бібл.: 23.

THE IMPACT OF THE BUDGETARY COMPONENT OF FISCAL POLICY ON MACROECONOMIC GROWTH IN CONDITIONS OF FINANCIAL DECENTRALIZATION: CASE OF UKRAINE

The article examines the role of the budget component of Ukraine’s fiscal policy in macroeconomic growth. The directions of increase of economic growth under the influence of financial decentralization are offered. The expediency of using multifactor economic and mathematical modelling in the study of the dynamics of the national accounts of Ukraine under the influence of indicators of the budget component of fiscal policy is substantiated.
 The purpose of this study is to investigate the dynamics of national accounts under the influence of the budget component of fiscal policy in the context of financial decentralization. A number of methods have been widely used in the study, including economic and mathematical modelling, correlation-regression analysis, factor analysis, and so on. These methods will underpin the development of strategic prospects for economic growth of the Ukrainian economy under conditions of financial decentralization.
 It is substantiated that an increase in the share of local budget expenditures in consolidated budget expenditures and a decrease in the share of state budget expenditures in GDP lead to an increase in the physical volume index of GDP and an increase in GDP in actual prices. It is also proven that the share of local budget expenditures in consolidated budget expenditures has an immediate direct impact on the GDP physical volume index.
 Another significant factor of direct influence on the GDP physical volume index is identified – the share of capital expenditures (development expenditures) in local budgets, as one of the indicators of financial decentralization efficiency. It is substantiated that the share of state budget expenditures in consolidated budget expenditures is a factor of inverse effect on GDP (in actual prices), and the share of capital expenditures is a factor of direct influence.
 It is proved that financial decentralization in Ukraine is an important factor of economic growth of the Ukrainian economy, as the increase of the share of local budget expenditures in the consolidated budget expenditures and the reduction of the share of state budget expenditures in GDP lead to an increase in the GDP physical volume index and an increase in actual GDP.

Air and climate protection in Poland and local expenditure – study of the Kazimierski poviat

Air and climate protection in Poland and local expenditure – study of the Kazimierski poviat

The effect of locally-generated revenue, capital expenditure, and investment on economic growth in Lamongan (Indonesia), 2010–2019

Since economic growth is a macro indicator of successful development, all countries strive to get maximum economic growth to create public welfare, especially for developing countries. Therefore, using the example of a city in one such country, namely Lamongan in Indonesia, let’s examine the effects of local income, capital expenditure and partial investment simultaneously on economic growth. Thus, the object of the research is the influence of locally-generated revenue, capital expenditure, partial investment, and simultaneously economic growth in the Lamongan in 2010–2019.This research was established with a quantitative approach. The data used are secondary data published by the Central Bureau of Statistics of Lamongan, the Regional Financial and Asset Management Agency of Lamongan, the Office of investment, and One-Stop Services, Lamongan in 2010–2019. The results of the study conclude that partially the locally-generated revenue variable has a significant negative effect on economic growth in Lamongan in 2010–2019, capital expenditure has a significant positive impact on economic growth in Lamongan in 2010–2019, and investment did not hurt economic growth in Lamongan in 2010–2019. Simultaneously, the locally-generated revenue variables, capital expenditure, and acquisition significantly affected Economic Growth in Lamongan in 2010–2019. This study’s results are expected to become information, reference materials, and references to develop and expand future research. For the Lamongan government, this research can be used as a necessary consideration and input to improve policies related to increasing economic growth of country.

A comprehensive approach to intergovernmental grants\u2019 tactical allocation. Theory and estimation guidelines

Political economy literature highlights the tactical use of intergovernmental grants for electoral purposes; however, it provides different mechanisms and explanations behind these patterns. In this paper, we propose a model that includes 3 branches of the literature in order to provide a comprehensive explanation behind the tactical allocation by central governments. We identify 3 key parameters that shape the tactical allocation of grants: the electoral rule, the relative importance of the objective of the central government with respect to the local government, and the extent to which citizens attribute local expenditure to the direct action of the local government vs the central government (local political appropriability). In addition, our model also provides a guideline for designing and interpreting empirical results on the tactical allocation of grants distribution.

The Effect of Local Expenditure, Local Wealth Level, Audit Opinion, and Audit Findings on the Performance of Indonesian Local Governments

This study aims to determine the effect of local expenditure, local wealth level, audit opinion, and audit findings on the performance of local governments. This study uses the quantitative method, the hypothesis testing with multiple linear regression analysis was used, using SPSS version 23. The population is the local governments of Districts/Cities in Indonesia. The sample is 489 data samples were collected. Results obtained from testing showed that local expenditure, local wealth level, and audit opinion significantly affect the performance of local governments. Meanwhile, audit findings do not have a significant effect towards the Performance of Local Governments. Future studies are expected to be able to add more variables that have not been used in this study, such as government size, local standing, and intergovernmental standing.

Efek Budget Ratcheting Pada Anggaran Pemerintah Kabupaten/Kota Provinsi Sumatera Barat

This research is aimed to know the effect of budget ratcheting in local revenue, balancing funds, and capital expenditures. This study also examines how the effects of budget ratcheting in the relationship between local revenue to regional expenditures. This research is categorized as causative research. The population in this study are all regencies / cities in the province of west sumatra, which are 12 districts and 7 cities. Sampling in this study was conducted using total sampling. The data in this study were sourced from the district / city local government financial statements in west sumatra province in 2014-2018. The data in this study were processed using spss 23. The results of this study indicate that there is a budget ratcheting effect in local revenue, balance funds and capital expenditures. the results of this study also show that local revenue influences regional expenditure and budget ratcheting to weaken the relationship between the two.

An Investigation into the Intertemporal Spending Path of Local Government in Mauritius

This article examines whether local government expenditure in Mauritius is characterised by an intertemporal decision-making path. In other words, to what extent does local government expenditure respond to contemporaneous changes in revenues. In this respect, the article contributes to the existing body of literature by exploring the context of an upper-middle-income country like Mauritius while factoring intertemporal choice in the supply of local public goods. Moreover, the article determines the short-run and long-run responsiveness of local public expenditure to Gross Domestic Product (GDP) through an error correction model based on time series data for Mauritius over the period 1987–2017. Our findings indicate that local government spending becomes less sensitive to its previous values when GDP and its past values are introduced as control variables in the model. Local government expenditure and real output are also found to be co-integrated or to share a long-term relationship. JEL Classification: B22, C1, D9, H4, H11

Financial Decentralization and Fiscal Imbalance of Local Budgets in Ukraine

The purpose of the article is to identify the correspondence between the revenue and expenditure parts of local budgets, which are responsible for the significant part of state expenditure financing due to financial decentralization reform. The article provides a comparative analysis of decentralization levels of local budgets in Ukraine and European countries by revenues and expenditures, as well as analyzes the structure of revenues and expenditures of the consolidated budget which include state and local budgets. The article notes that over the past ten years, the gap between revenue and expenditure has narrowed due to decentralization reform, but fiscal balance has not been achieved.The results of the analysis demonstrate the existence of a significant vertical imbalance in the budget system of Ukraine, which consists in the insufficiency of own and fixed financial resources of local authorities to ensure their powers. In terms of income decentralization, Ukraine ranks middle among Eastern European countries, while the level of expenditure decentralization corresponds to the level of Scandinavian countries, where the state plays an active role in income redistribution and has high institutional efficiency and high social standards. The article substantiates that the vertical imbalance exist due to the inefficient structure of local budgets’ revenues, in particular the high share of transfer payments from the state budget to local budgets, as well as the low share of own revenues, namely local taxes, in tax revenues. In order to strengthen the revenue side of local budgets and reduce vertical imbalances it is proposed to increase the tax base of local taxes through development of business and welfare in the regions, to increase the share of deductions from corporate tax and personal income tax to local budgets, to improve the control over local budget revenues and to optimize local expenditures, including social protection and social security expenditures. As the practice of foreign countries with decentralized budget systems shows, the elimination of vertical imbalances leads to a significant increase in the fiscal capacity of the regions. JEL classіfіcatіon: E62, H61, H71, H77 Manuscript received 30.04.2020

일제하 대만 지방 세출의 구조와 추이, 1902~1936

This Article has three goals. First, I tried to set up some useful categories regarding local annual expenditures in order to analyze them effectively. Second, I tried to reconstruct the structure and trends of Taiwan local annual expenditures from 1902 to 1936. And finally, I tried to describe the outline of the relations between local annual expenditures and the central(Government-General) annual expenditures through analysis of educational expenses, police expenses and public health expenses.<BR> From the viewpoint of local revenues, Government-General of Taiwan was able to realize its policy goals, avoiding some interventions that home government or Imperial Diet could inflict, and from the viewpoint of local expenditures, it was able to effectively distribute local revenues and central revenues, according to its necessities and aims. For example, it spent a lot of central financial resources into police expenditure because it wanted to maintain its influence on police sector. Whereas it was not so eager to spent its own money on education or public health sector, so it spent local money on those sectors.<BR> Such structures of Taiwanese local expenditure had a lot of things in common with modern Japanese local expenditure. from the viewpoint of local expenditure, central expenditure was always dominant over local expenditure, and local expenditure was spent on delegated administrative affairs, not native administrative affairs. But the biggest difference between Japan and Taiwan was that Japanese locals had their own local assemblies which could keep local authorities in check, whereas Taiwanese just had “false” local assemblies which had little voice on money spending by local authorities.

Local Fiscal Autonomy in China: Historical Evolution and Hierarchical Differences, 1990–2014

Abstract Local fiscal autonomy has a great influence on government behavior. However, there are substantial regional gaps and hierarchical differences in local fiscal autonomy in China. On the whole, although for many years most of China’s counties have enjoyed little fiscal autonomy, counties in the east have gradually won increased autonomy. Counties in the central and western regions, however, have continued to lose fiscal autonomy. Some have even lost the most basic level and now rely on transfer payments from higher-level governments for most of their local public expenditures. County expenditures make up the majority of national expenditures. Therefore, a low level of county fiscal autonomy impedes China’s county-based fiscal system reform and has a marked impact on government behavior and local governance.

The Moderating Role of Hotel Type on Advertising Expenditure Returns in Franchised Chains

This study contributes to a deeper understanding of financial returns from the advertising of hospitality services. Specifically, we investigate how different types of franchised hotel outlets, each targeting a different customer segment, moderate the effects of various advertising expenditures on unit-level profitability. Our unique data set allows us to examine the impact of unit-level advertising expenditure allocations using line items from the profit and loss statements of more than 9,000 franchised U.S. hotel properties from 2007 to 2018. We consider the effects of investing in varied advertising activities, including the franchise advertising assessment, loyalty programs, local sales force, and local media advertising. As hypothesized, we find differential effects of advertising for outlets targeting different customer segments. Relative to traditional full-service hotels, those focused on destination-driven customer segments (i.e., destination hotels) and price-sensitive customer segments (i.e., limited-service hotels) benefit less from investing in the franchise advertising assessment, loyalty programs, and local media advertising. We also find that local sales force expenditures positively moderate performance for destination hotels. We highlight the moderating effects of hotel type as a key situational factor and provide more nuanced insight into managing the tension arising from advertising allocation at franchised hotel chains.

A Study on the Determinants of the Local Grants Expenditure by Local Governments: Focusing on Intergovernmental Grants-in-Aid

A Study on the Determinants of the Local Grants Expenditure by Local Governments: Focusing on Intergovernmental Grants-in-Aid

Local government size and service level provision. Evidence from conditional non-parametric analysis

Although the local provision of public goods accommodates better to the heterogeneous local preferences and mitigates the fiscal illusion problem, it comes at the cost of potential diseconomies of scale. This paper examines the relationship between municipal size and local service level provision by applying state-of-the-art non-parametric techniques to a unique panel dataset of Flemish data. We measure the service provision level by using an innovative robust conditional ‘Benefit of the Doubt’ model and we estimate its efficiency in relationship with the local expenditures by means of a robust conditional Data Envelopment Analysis model. Overall, the main findings suggest the presence of diseconomies of scale, and provide weak evidence on an optimal size of local public good provision of around 10,000 citizens.

Analysis of Local Expenditure Determinants in Districts/ Cities in the East Java Province

This study aims to test the effect of Local Own-Source Revenue, General Allocation Fund, Special Allocation Fund, and Population Amount towards Local Expenditure. This study used all 39 districts/cities in the East Java Province as samples. The sample collection method used in this study is the saturated sample method. This study uses secondary data from the Budget Realization Report and population. The analysis method used is the double linear regression method using SPSS with a significance rate of 5% (0.05). The result of this study shows that Local Own-Source Revenue, General Allocation Fund, and Population Amount has a significant effect towards Local Expenditure. Meanwhile the Special Allocation Fund partially does not have a significant effect towards Local Expenditure. This contribution for the Local Government of the East Java Province is hoped to be able to provide information to the people regarding the importance of paying taxes, since the payment of taxes will increase the region’s Local Own-Source Revenue, and in turn promote the people’s welfare

Partisipasi Masyarakat Memoderasi Pengaruh PAD, Dana Perimbangan, dan Belanja Modal Pada Kinerja Keuangan

The research aims to analyze the influence of local government revenue, fiscal balance funds, and capital expenditures on the financial performance of local governments with community participation as a moderating variable. The population in this study were all regency and city governments in Bali Province consisting of 8 regencies and 1 city with a period of 5 years from 2014 to 2018. The total population in this study was 45. The sample technique used was the saturated sample the analysis technique used is Moderated Regression Analysis (MRA). The results of the study showed that the local government revenue and capital expenditure had a positive effect on the financial performance of the regional government, while the fiscal balance fund had no effect on the financial performance of the regional government. Community participation strengthens the influence of local revenue, balance funds and capital expenditure on the financial performance of local governments.&#x0D; Keywords : Local Government Revenue; Fiscal Balance Fund; Capital Expenditure; Community Participation; Financial Performance.

Wagner’s Law and Fiscal Illusion: An analysis of state government finances in Brazil

AbstractThe aim of this article is to analyze state‐level public finances in Brazil. We examine the dynamics of governmental spending in a panel of 26 Brazilian states in search of evidence of Wagner’s Law and Fiscal Illusion Hypothesis. For the period ranging from 2002 to 2015, three methodologies are applied: dynamic ordinary least squares (DOLS), fully modified ordinary least squares (FMOLS), and pooled mean group (PMG). The main empirical results found indicate that (1) there is strong evidence of Fiscal Illusion caused by public deficit and by central government transfer grants; (2) there are possible Flypaper Effects; (3) there is no evidence in support of Wagner’s Law; (4) there is low publicness degree of local expenditures; (5) due to Fiscal Illusion, less‐developed Brazilian states tend to be stuck in a public expenditure growth mechanism, especially in expenses related to non‐public goods, which tend to benefit private interests and lobby groups.

Cost-effectiveness of the common agricultural policy and environmental policy in country districts: Spatial spillovers of pollution, bio-uniformity and green schemes in Poland

A significant part of the common agricultural policy (CAP) focuses on implementing environmentally friendly practices, which have been evaluated in many studies. However, these analyses do not usually consider spatial spillovers that may concern pollution and biodiversity, as well as participation in policy schemes. Most studies evaluate national environmental policies at the macroeconomic level, focusing on cities. However, the majority of natural resources are in rural districts, and environmental policy is mainly implemented at the local level, where most of the budgets for environmental protection are decided. Thus, in this paper, our first objective is to assess the cost-effectiveness of Poland's environmental policy schemes, combining local expenditures at the county level with the CAP's green schemes. Additionally, we investigate the spatial (neighbourhood) effects of environment quality and the policy, as well as their mutual interactions. First, the environmental quality at the county level is proxied by the composite environmental quality index (CEQI); second, the Spatial Durbin Model (SDM) with endogenous covariates is estimated. Third, the interactions among the policy's spatial effects are explored using the structural equation model (SEM). We find that the CAP's green component not only positively affects the environmental quality in the long term but also generates positive spillovers that have been hitherto underestimated.

The housing business cycle of local public finance: empirical evidence from Taiwan

ABSTRACT This paper attempts to investigate the association between local public finance and housing market. We deal with the potential endogeneity problem by utilizing two-stage-least-square (2SLS) model. Our empirical results suggest that (1) the average housing price is positively and significantly associated with local revenue. (2) The average housing price is positively associated with local expenditure, though not significantly. (3) The rise of average housing price is also proven to reduce the local deficit significantly. (4) While the flypaper effect is obvious in Taiwan’s local expenditure, the opportunistic political business cycle theory is not so significant.