Local Government Expenditure Research Articles

State and Local Government Expenditures and Infant Mortality.

A previous study reported that increased state and local government expenditures were associated with decreased infant mortality rates (IMRs). However, reported estimates of the association between expenditures and IMR represented the degree to which the association changed each year, not the main effect. We reproduced the original results, reporting this main effect and replicated the analysis using improved methodology and updated data. For the reproduction analysis, we used methods and data identical to the original study: A publicly-posted, state-level data set of expenditures from 2000 to 2014 US Census Bureau survey data linked to 2-year lagged IMR data with a random intercept model including an interaction between time and expenditures. For the replication analysis, we added 5 years of data and adjusted for fixed state differences and inflation. In the reproduction, the main effects of total, environmental, and educational expenditures on IMR were much larger than the interaction effects previously reported as the main effects. For example, a 1-SD increase in per-capita total expenditures was associated with a reduction of 0.35 infant deaths per 1000 live births instead of 0.02 deaths per 1000 live births originally reported. In the updated replication, the main effects were generally even larger (eg, -0.51 deaths per 1000 per SD increase in total expenditures). Increased total expenditures were associated with absolute but not relative reductions in Black-white IMR gaps. State and local government expenditures are associated with greater reductions in IMR than previously reported, underscoring the importance of continued public investment.

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

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

State Social Expenditures and Preterm Birth and Low Birth Weight in the US

Adverse birth outcomes in the US, including preterm birth and low birth weight, are strongly tied to socioeconomic disadvantage and disproportionately impact infants of Black mothers. Increasing investments in social programs represents a potential policy approach to addressing disparities in birth outcomes. To examine state-level associations of government expenditures on social programs with rates of preterm birth and low birth weight both overall and by race. This cross-sectional, ecological study was conducted among liveborn infants in the 50 US states between January 1, 2011, and December 31, 2019. Data analysis was performed from May 2022 to May 2024. Yearly state and local government expenditures per low-income person on social programs in the following categories: state refundable Earned Income Tax Credit; cash assistance; childcare assistance; housing and community development; and public health. Yearly state-level rates of preterm birth (gestational age <37 weeks) and low birth weight (<2500 g). From January 1, 2011, to December 31, 2019, there were 35.1 million live births in the US, of which 3.4 million (9.8%) were preterm and 2.8 million (8.1%) were low birth weight. Median (IQR) state social expenditures per low-income person were $1546 ($1074-$2323). Greater total state social expenditures were associated with lower overall rates of preterm birth (adjusted prevalence ratio [aPR] for every increase of $1000 per low-income person, 0.99; 95% CI, 0.97-0.999) but not with overall rates of low birth weight. In secondary analyses, greater state social expenditures were associated with lower preterm birth rates for infants of Black mothers (aPR, 0.96; 95% CI, 0.92-0.999). Greater state expenditures specifically on cash assistance (aPR, 0.64; 95% CI, 0.43-0.94) and housing and community development (aPR, 0.91; 95% CI, 0.84-0.98) were associated with lower preterm birth rates for infants of Black mothers. In this cross-sectional, ecological study, greater state-level expenditures on social programs were associated with reduced rates of preterm birth, particularly for infants of Black mothers. State and local governments may consider bolstering investments in cash assistance and housing and community development to address maternal and infant health disparities.

The impact of local government expenditures on local gross regional domestic product per capita in Vietnam

The allocation of funds in the local budget is a matter of concern for the governments and economic scholars. The study examines the influence of local budget expenditures on the GRDP per capita of 63 provinces and municipalities in Vietnam from 2018 to 2022. Regression analysis of panel data reveals that capital expenditure has a positive correlation with local GRDP per capita, whereas current expenditure has a negative correlation with GRDP per capita. Furthermore, the analysis indicates that the percentage of individuals aged 15 and above who are employed and the percentage of urban citizens have an equivalent influence as the GRDP per capita. Conversely, the average age and local Gini coefficient have contrasting effects on GRDP per capita. The author suggests several policy alternatives to assist localities in boosting their GRDP per capita based on the findings of the study model.

Analysis of Factors Influencing Total Retail Sales of Consumer Goods in Hainan Province, China

The total retail sales of social consumer goods is a comprehensive reflection of a country's consumption capacity, consumption structure and living standard, which is of great significance for evaluating a country's economic vitality and social development level. In recent years, with the continuous expansion of the consumer market and the improvement of consumers' purchasing power, the total retail sales of social consumer goods has continued to grow, and its role in the national economy has gradually increased. However, there are many factors that affect the total retail sales of social consumer goods, including economic environment, policies and regulations, consumer behavior and so on. Under this background, this paper takes Hainan Province as the empirical research object, and selects per capita disposable income, rural residents' per capita disposable income, gross domestic product, resident population at the end of the year and local government's general budget expenditure as explanatory variables to analyze the factors affecting the total retail sales of social consumer goods. The results show that the average disposable income of rural residents and the general budget expenditure of local governments are significant factors affecting the total retail sales of social consumer goods in Hainan Province. Finally, the model is analyzed economically, and some conclusions are drawn, and some policy suggestions are put forward.

Impacts of fiscal decentralization on performance of local government expenditure: Evidence from Vietnam

This article aims to examine the impact of fiscal decentralization on the performance of local government expenditure in Vietnam. By using a dataset including 63 provinces from 2012 to 2021, the research shows the more expenditure-based fiscal decentralization occurs, the better is the performance of local expenditure. Moreover, the level of provincial literacy and the size of the private sector have positive impacts on the local expenditure index, while the opposite effect can be seen in the case of the ratios of local citizens to total citizens of the country. Besides this, the study also provides some recommendations which are strictly related to the mechanism of fiscal decentralization to improve local expenditure performance of Vietnamese provinces, such as more effective decentralization of budget expenditures to local government, improving the vertical budget imbalance at local budget level, increasing local government budget autonomy, and establishing stronger mechanisms to control public spending.

Regional trends in mental health inequalities in young people aged 16–25 in the UK and the role of cuts to local government expenditure: Repeated cross-sectional analysis using the British household panel Survey/UK household longitudinal survey

Young people's mental health globally has been in decline. Because of their low perceived need, young people's services tend to be the first cut when budgets are reduced. There is a lack of evidence on how a reduction in services and opportunities for young people is associated with their mental health. Additionally, how this may be magnified by place and the assets and challenges of place. The aim of this study is to explore trends in young people's mental health measured by GHQ-12 over time in the twelve regions of the UK. We estimated an interrupted time series model using 2010 as a break point from which there was a shift in government policy to a prolonged period of large reductions in central government funding. Repeated cross-sectional data on young people aged 16–25 is used from the British Household Panel Survey and its successor survey UK Household Longitudinal Survey. Results showed a statistically significant reduction in mental health for young people living in the North East, Wales, and the East of England. The North East was the region with the largest reduction in funding and saw the greatest reduction in young people's mental health. Next, we look at how reductions in local government expenditure related to services for children and young people: children's social services, education, transportation, and culture; explain the observed decline in mental health. We employ a Blinder-Oaxaca Decomposition approach comparing young people's mental health between 2011 and 2017. Results show a marginally statistically significant decrease in young people's mental health over this time. Unobserved factors related to transport spending and children's social services explain some of this gap. Area level factors such as deprivation, infrastructure, and existing assets need to be considered when distributing funding for young people's services to avoid exacerbating regional inequalities in mental health.

Fiscal decentralization and economic growth: Empirical evidence from European countries

In this paper we empirically investigate the relationship between fiscal decentralization and economic growth in the European countries, using panel dataset for 31 European countries, over the period 1972-2012. Our empirical results indicate that fiscal decentralization, quantitatively measured as the ratio of local government expenditures and revenues in general government expenditures and revenues has a favorable impact on economic growth in the European countries and also that revenue decentralization is shown to be more effective than expenditure decentralization in terms of stimulating economic growth. Further, our empirical results also suggest that the relationship between decentralization and economic growth is nonlinear, i.e. there is a certain optimal level of fiscal decentralization in terms of economic growth. This means that fiscal decentralization is expected to have a more pronounced positive impact on growth in less decentralized countries, while in more decentralized countries, a further increase in decentralization starts to hinder economic growth. In addition, the growth-enhancing effect of fiscal decentralization is even strongly confirmed in our subsample of advanced European countries, when long termed effect of decentralization was examined. Therefore, compared with our previous findings on the impact of fiscal decentralization on growth in Central and Eastern European countries, we find that fiscal decentralization has a different impact on economic growth in advanced European countries vis-à-vis Central and Eastern European countries, i.e., while it enhances growth in the former, it hindered growth in the latter.

Does Inequality Still Matter? Income Heterogeneity and Local Government Expenditure

Does Inequality Still Matter? Income Heterogeneity and Local Government Expenditure

The impact of digital inclusive financial development on local government expenditure: Evidence from China.

This paper investigates the impact of digital inclusive financial development on local government expenditure incentives at the income level. It does so by constructing a multi-level government Dynamic Stochastic General Equilibrium (DSGE) model that incorporates the financial sector. By employing empirical methods that involve uncertainty shocks and counterfactual simulations, the research yields several key findings. Firstly, the development of digital inclusive finance contributes to breaking down the urban-rural dual financial structure, thus facilitating balanced economic development within regions. Secondly, it reduces the proportion of financially excluded areas, accelerates fiscal decentralization, leading to an increase in local government fiscal revenue, and, consequently, an expansion of local fiscal expenditures. Thirdly, at a certain stage of digital inclusive finance development, it tends to crowd out residents' investment and consumption. Therefore, the decentralization of fiscal power and the expansion of local government expenditure at this stage may paradoxically inhibit regional economic growth. The study's conclusions validate the significant impact of digital inclusive finance on local government incentives at the income level.

Local Food Culture Festival Management Model in Papua

This research is a continuation of research and service as well as articles presented in international seminars and Bapenas FGDs. Research, PkM, International Seminars and FGDs from BAPENAS that have been carried out provide an illustration that Papua has great potential in local food, especially those made from sago. This is supported by the availability of sago forests and people who are starting to understand the preservation of sago forests and people who are creative in processing sago food in various preparations. However, the community has not yet found the right form to promote local food well and have a big impact. Conditions like this provide an opportunity for the government and academics to play a role in formulating the right strategy and realizing it in a major activity that can be known by many people nationally and internationally. One of the activities that can support the condition of people who are in this position is the government implementing a Local Food Culture Festival which is held on a scheduled schedule every year. This research aims to create a management model for local food culture festivals which is carried out in 2 (two) stages, namely Phase I (2023) sharing knowledge of the research team with festival management experts at UNY as well as concocting a suitable or appropriate form for festival management in Merauke Regency, as well as Benchmarking at several Cultural Festivals organized by the Yogyakarta Special Region Government (DIY) in September 2023, and Phase II (2024) the research team will carry out education and FGDs for 3 days for the Tourism and Culture Offices of Merauke Regency and South Papua Province as well as the candidates festival participants from the local food business community. The results of this research found that organizing a festival requires high synergy from the organizing team itself and from the government and sponsors. The most important thing is that it is necessary to carry out a survey or initial analysis of the festival theme which can describe the vision of the activities, potential and targets to be achieved by the festival. The budget and activity plan must be determined well in advance so that it can be included in the annual expenditure of sponsors or local governments. The selection of the organizing team must also be a professional team or a combination of a professional team and the sponsor, so that the implementation can go according to plan. Apart from that, the community must also be involved or empowered to participate. What is different about festivals held in the Papua region is the very dominant role of local communities involved in helping to improve the economy of the local population and promoting existing Papuan culture, apart from that there is still a lack of third parties who are willing to sponsor festival activities in Papua, especially Papuan cultural and local food festival.

Inclusive economic growth and fiscal intervention: could it reduce poverty, inequality, and unemployment in East Java?

Before the COVID-19 pandemic, East Java Province (then abbreviated to East Java) made remarkable achievements in economic growth accompanied by a continuing downward trend in poverty. Then, after the COVID-19 pandemic broke out in 2020, it had a detrimental impact in terms of health, economics and social aspects. Specifically for East Java, the outbreak caused a severe contraction in the economy and significantly increased the number of local unemployed. However, long before COVID-19, East Java was facing wide inequality. Based on these problems, this study evaluates whether inclusive growth and local government fiscal intervention are solutions. These two factors have been recommended by economist as an effective strategies for reducing the triple problem in East Java. Fiscal intervention is interpreted as expenditure policies in economic, education, and health functions. Using panel data regression during 2015-2021, the study documents that economic growth in East Java still needs to be fully inclusive. This is based on the finding that inclusive economic growth does not simultaneously reduce triple problems (poverty, inequality and unemployment). Inclusive growth reduces poverty in East Java, but it has the opposite effect on unemployment and inequality. On the one hand, positive findings are documented in which fiscal intervention in education spending plays a significant role in reducing poverty. Unfortunately, this study failed to find the determining factors that provide a solution to inequality and unemployment in East Java. These evidences certainly have implications for reviewing the quality of inclusive growth and local government expenditure policies.

Political Budget Cycles and Mayoral Influence in Latvian Municipalities: An Examination of Revenue, Expenditure, and Electoral Dynamics

Budget allocation and budget planning can be used in different ways. In addition, it can be part of a political budget cycle. Previous research has highlighted the political budget cycle's existence in European countries, demonstrating its impact on public revenue and expenditure near elections. However, citizens often lack awareness of this phenomenon, underscoring the need for vigilant scrutiny. In addition, elected politicians increasingly rely on voters for support, targeting them during budget allocation and election campaigns. In Latvia, the mayors have a role in budget planning because they work full-time and are the head of the financial commission. In Latvia, despite a lack of trust in local politicians, there is a tendency for most of the mayors to be re-elected. The article aims to examine what kind of role the council’s chairperson has in the local government's budget allocation process and what factors affect the budget allocation process in Latvia. The article’s scope encompasses the years 2009 to 2017, spanning two election terms (2009-2013; 2013-2017), and focuses on eight state cities in Latvia, excluding the capital city, Riga. Notably, local governments with a higher percentage of council members from the mayor's party tend to exhibit higher expenditure levels. The findings of this study suggest that various socio-economic and political factors impact the financial performance of local governments in Latvia. These results underscore the significance of population and unemployment in shaping local government expenditures. Simultaneously, this research has highlighted the importance of political factors such as the majority in the local government and time spent in the mayor’s position. Moreover, it reveals that long-serving mayors and a majority in the council also influence budget allocation decisions. This article's implications can guide policymakers in making informed decisions regarding municipal budget expenditures and revenues.

Efficiency of Public Expenditure in Sumatera before Covid-19 Pandemic Era

This study will analyze the efficiency of local government expenditure towards the Human Development Index (HDI) indicators achievement. To see the realization, this study will conduct an efficiency analysis of local government expenditures in Indonesian’s 34 provinces at 2015-2018 periods. Furthermore, this study tries to find out which sectors are affect efficiency, and conducts a descriptive analysis of the effect of the covid 19 pandemic on these sectors. Based on the study result, it can be suggested to the local government as follows; Provinces that have reached maximum efficiency levels must be able to maintain government performance by maintaining a large portion of inputs, and continue to work to increase output. So that the level of community welfare can be maintained, or even increased in the following year. In general, its necessary to optimize in terms of the effectiveness of the budget for education, health and public services on the input side for all provinces. Meanwhile, from the output side, the target Life expectancy and Expected Years of Schooling need to be improved.

EXAMINING CHALLENGES OF THE PROSECUTORS ERADICATING CORRUPTION WITHIN CAPITAL EXPENDITURES IN INDONESIA’S LOCAL GOVERNMENT

Objectives: This study explores corruption in the capital expenditure of local governments and prosecutor officials’ failure to combat it. This is associated with the rampant corruption in the procurement (called capital expenditure) of local governments in Indonesia, with a corruption risk of 79%. This prevalent corruption aligns with the escalating complex challenges faced by the prosecutors in its endeavors to unveil and address it. Method: This study scrutinizes archival data and field data used an instrumental case study strategy within the framework of Actor Network Theory (ANT). We get field data through in-depth interviews involving 56 key informants in Yogyakarta's City and Regencies—specifically, Sleman Regency, Bantul Regency, and Yogyakarta City. Results: The findings of this investigation underscore the formidable challenges encountered by prosecutors in addressing corruption within the realm of capital expenditure in local government. First, the deficient financial acuity of prosecutors obstructs the exhaustive gathering of information pertaining to corrupt practices in capital expenditure, consequently complicating their ability to combat corruption effectively. Second, these officials grapple with interventions that further complicate their efforts to tackle corruption, as a result exacerbating the intricacies of the task they are currently facing. Conclusions: This research contribute originally to develop an analysis to decipher the local prosecutor officials fail in combating local corruption effectively, in which useful enhance anti-corruption strategies related to execution of local capital expenditures. The study also provides an insight to improve the understanding of local and national policymakers dealing with the corruption eradication ineffectively in capital expenditures.

The Effect Of Population Size And Number Of Motor Vehicles On Local Tax Revenue With GRDP As A Moderating Variable

Local taxes play a crucial role in advancing a region. Besides financing local government expenditures, local taxes also enable regional governments to create greater fiscal autonomy, providing flexibility in fund allocation. However, the contribution of local taxes to regional revenue remains relatively small, at only 38%. Therefore, it is essential to identify factors influencing local tax revenues across all provinces in Indonesia to optimize local tax revenue. This research employs linear regression with generalized least square (GLS). The results indicate that the population size, the number of motorized vehicles, Gross Regional Domestic Product (GRDP), interaction between population size and GRDP, and interaction between the number of motor vehicles and GRDP, have a significant effect on local tax revenues simultaneously. However, partially, the population size does not affect local tax revenues. On the other hand, the number of motor vehicles and GRDP positively influence local tax revenues. Furthermore, the moderation regression analysis reveals that GRDP strengthens the influence of the population size on local tax revenues. Conversely, the interaction between GRDP and the number of motor vehicles shows that GRDP weakens the positive effect of the number of motor vehicles on local tax revenues.

Analisis Hubungan Pertumbuhan Ekonomi dengan Kemiskinan dan Belanja Modal Pemerintah Daerah, Penyerapan Tenaga Kerja, dan Indeks Pembangunan Manusia

Purpose: This study examines the effects of local governments’ capital expenditures, labor absorption, and the Human Development Index on economic growth and poverty in 35 districts/cities in Central North Sumatra. Methodology/Approach: Quantitative research was used in this study. The secondary data were used by the researchers. Capital expenditures of local governments, labor absorption, and the Human Development Index are exogenous variables, while economic growth and poverty level are endogenous variables. Results: The results showed that the four proposed hypotheses were accepted, and the hypothesis was rejected. Limitations: Ownership structure and ownership have no relationship with debt policies. Contributions: Nasution et al. (2023) The results showed that the four proposed hypotheses were accepted and the hypothesis was rejected. Hypothesis 1 suggests that local government capital expenditures have a significantly positive effect on economic growth. Hypothesis 2 suggests that labor absorption has a significantly positive effect on economic growth. Hypothesis 3 suggests that the Human has a significantly positive effect on economic growth. Hypothesis 4 suggests that economic growth has no significant effect on poverty. Hypothesis 5 suggests that the Human Development Index has a significantly negative effect on poverty.Index is a significantly negative effect on poverty.

The Impact of the flypaper effect on the Province of Bangka Belitung in the Context of Spatial Relationships

Local governments must ensure proper financial management by carefully planning the allocation of regional funds (such as DAU/DAK/DBH) and expenditures (BELANJA), as well as maximizing effective and efficient income (PAD). However, the funds received by the regions from the central government are being used in an uneven manner, referred to as the flypaper effect. Despite this, the local government's expenditures have failed to close the fiscal gap and the amount of regional funds being used is greater than the amount of regional income. This study trains to examine the presence of the flypaper effect in Bangka Belitung and the impact of spatial elements on it. Utilizing data from 2006 to 2020 and employing a modified row normalized queen contiguity modified matrix with direct transportation connection, the research objectives were deployed. The study utilized the Spatial Durbin Model (SDM) to analyze the data. The findings indicated the presence of the flypaper effect in the Bangka Belitung Islands with spatial dependencies between 2006 and 2020. And only the Decentralized Allocation of Funds (DAU) was affected by the flypaper effect when there was spatial interdependence in Bangka Belitung. The influence of DAU on regional expenditure (BELANJA) was stronger than its effect on regional income (PAD). Increasing BELANJA in one jurisdiction would lead to an increase of 37 percent in other regions. The spillover effect of the decomposed lump-sum grants was related only to DAU in the context of spatial relationship. Local expenditure in Bangka Belitung was dependent on other locals.

Communes’ Expenditure on Municipal Waste Management in Terms of Sustainable Development

Theoretical background: As we work towards achieving sustainable development under Goal 12, which entails promoting sustainable consumption and production patterns, one of our key tasks is to minimize waste generation through prevention, reduction, recycling, and reusing. Local government units (LGUs) have a significant role to play in implementing this task. By investing in municipal waste management, LGUs can influence the behavior of residents toward responsible waste collection and management, including hazardous waste. Purpose of the article: This article aims to evaluate how local government spending affects municipal waste management in different voivodeships. The hypothesis of this paper is that local government expenditure improve waste management effects. To achieve effective spending that supports sustainable development, public authorities at the regional level must coordinate their activities and adapt to EU standards. Research methods: This article used literature and statistical analysis to adopt dynamics indicators and correlation coefficients. Data on selected variables for the study came from the Local Data Bank of the Central Statistical Office and Eurostat. Main findings: According to the analyses conducted, there has been a positive development in municipal waste management in Polish communes. This suggests that the government’s policies are contributing towards achieving the sustainable development goal of responsible and sustainable waste management, especially when it comes to hazardous waste. These findings could be utilized to recommend to public authorities the necessary changes to fiscal instruments that would promote sustainable public finances.

Local Government Expenditures, Institutional Quality and the Inclusive Economic Development Index (Iedi) in Indonesia

The purpose of this study was to determine the effect of local government spending and institutional quality on the inclusive economy in Indonesia. To avoid the problems of endogeneity and omitted variable bias, the method used in this study is the system generalized method of moments (GMM). It was found that local government spending on housing and social functions positively and significantly affected the Inclusive Economic Development Index (IEDI). In contrast, government spending on health had a significant negative effect. Spending on education had an insignificant negative effect, while investment had a positive and significant effect on IEDI. The corruption rate as a proxy for the quality of institutional processes had a significant adverse impact on IEDI. This study provides an overview of the role and influence of local government policies and institutional quality that affect the region’s development and inclusive economic growth.