Local Spending Research Articles

The Economic Footprint Of The FIFA World Cup

The FIFA World Cup is a premier global sport, since its inception in 1930, on the 15th of December. The World Cup event has substantial economic implications for its host countries. This study examines the economic footprint of the FIFA World Cup by targeting three key components: immediate benefits, long-term economical impacts, and associated challenges. The research incorporates economic data and impact assessments to offer insights into the complex balance of costs and benefits associated with the FIFA World Cup. Objectives of the Paper: At the outset, this research paper highlights the instant financial gains, such as increased tourism, which boosts local spending in businesses, hotels, and restaurants. The influx of visitors also generates short-term employment possibilities, providing temporary economic boosts. The analysis then turns to the long-term effects, observing that hosting the World Cup can lead to significant infrastructure development, including stadiums and transportation systems, which enhances urban development and quality of life. Additionally, a successful World Cup can improve the host city’s global footprints, possibly attracting future investment and tourism. However, the study also delves into the challenges involved. An overall cost of hosting, including construction, management, and security, can be substantial, sometimes outweighing the immediate benefits. Post-event periods can be complex, with decreased economic activity and maintenance costs for new infrastructure. Case studies of consecutive FIFA world cups including South Africa 2010, Brazil 2014, and Russia 2018 are examined to provide a balanced perspective of the varied experiences of different host nations. In final analysis, while the FIFA World Cup can bring significant economic benefits and long-term development, it also presents considerable financial challenges. The findings underscore the need for careful planning and management to optimize the event’s positive impacts and address possible drawbacks, providing essential lessons for anticipated host cities and nations.1

Do intergovernmental interactions increase government spending?

ABSTRACT This study investigates yardstick competition in local government spending in South Korea. By leveraging the exogenous variation introduced by by-elections, the study estimates the influence of neighbouring jurisdictions on local expenditures. The findings reveal no significant interdependence in spending among South Korean municipalities, which contrasts with previous empirical studies from other countries. The results suggest that conventional spatial econometric methods may overestimate the degree of interdependence in local spending.

The impact of intergovernmental fiscal tools on local service decision: the Nebraska case for water and wastewater systems

ABSTRACT This study examines the impact of federal funding on local spending for water and wastewater infrastructure (hereafter ‘W&WI’) in Nebraska. The recent deterioration of W&WI creates potential risks to citizens’ lives. The federal government operates several programmes to assist with W&WI improvements. However, funding is limited, while there are substantial demands for funding. To understand the fiscal impact of intergovernmental aid on local expenditures, this study utilised panel data from 2010 to 2018 for 129 Nebraska municipalities with population over 800 that have water and wastewater systems. This study finds some evidence of the stimulating (‘flypaper’) effect of federal aid on local expenditures. However, in disaggregated models, the aid has crowd-out effects on specific types of spending (e.g. operating expenses). The findings can contribute to policymakers’ understanding of the impact of federal funding programmes and suggest directions for improvement of these tools.

Evaluating Budget Functions for Effective Revenue and Expenditure Planning in Hulu River South District

The public sector budget has a function as a local financial management planning tool. BPKPD district of Hulu River South is an institution that carries out the duties of the local government in the planning of the regional budget. This study is aimed at finding out the application of budget functions as a tool for planning income and expenditure in the BPKPD district of Hulu River South. This study uses a method of quantitative research using a descriptive approach. The study uses three types of measurement analysis to find out the use of budget function as a planning tool, namely, the process of budgeting, the level of effectiveness of budget income, and the degree of efficiency as well as deviations in budget expenditures. The income budget effectiveness rate for 2022 reached 118.60% (more than 100%) with the category of highly effective, coming from three types of regional income. First, Regional Real Income with an efficiency ratio of 87.51% belongs to the effective category. Second, Transfer income with an effectiveness rate of 119.82% belonging to the highly efficient category. The calculation of the expenditure efficiency ratio showed less efficient access, with a ratio of 93.06%. Operations purchases obtained a rate of 75.92% in the efficient category. Capital purchases gained access to efficiency ratios of 91.41%, including the less effective category. Unexpected expenditures reached the rate of efficiency of 17.92%, in the highly efficient categories. Lastly, the transfer spending sector has an efficiency rate of 99.81% in the less efficient category. Secondly, the calculation of the variance analysis in the regional spending sector shows that the entire account in the local spending area has more variance. No spending account has a budget deficit as a result of the realization or achievement of greater income than estimated. The deviation that occurs on the entire account of the shopping sector is favorable.

Political Dynasties and Local Spending in Indonesia

Does political dynasty affect local spending in Indonesia? Only a few articles have taken up the political economy issues in Indonesia This study provides empirical analysis that focuses on explaining the effect of the political competition through dynasty winning in the mayoral election to the local spending that focuses on functional-classified expenditure at the district level. Using the Regression Discontinuity Design (RDD) estimation, this study examines whether the dynasty mayor has different trends in the way to spend local expenditure compared to the non-dynasty mayors. Due to the limited political competition, this study finds the magnitude effect of the dynasty mayor on local spending that used to drive the regional economy. Compared to the non-dynasty mayors on a separate sub-dataset, this study finds different effects of a dynasty between the incumbent and the non-incumbent dynasty mayor on local spending. The incumbent dynasty mayor negatively affects ‘visible’ expenditure’ e.g., grant and social assistance expenditure, social protection expenditure, housing and public amenities expenditure, education expenditure, dan current expenditure. This study also finds negative effects of the political dynasty on local spending from the dynasty mayor elected during the period of simultaneous mayoral election (2015-2018).

The impact of Google Maps application on the digital economy

Google Maps is indispensable for helping tourists navigate Thailand, which is a popular tourist destination. It includes comprehensive maps, points of interest, and lodging, dining, and attraction recommendations. It contributes to Thailand’s tourism industry’s growth by enhancing the overall travel experience (Amornvivat et al., 2017; The Nation, 2023). This study explains the Google Maps application’s impact on Thailand’s digital economy. This research adopted interviews with six Google Maps consumers and six business owners. Content analysis and NVivo were used to analyse the data. The results show that the Google Map application simplifies locating businesses, making reservations, and placing orders for users. Additionally, Google Maps recommends nearby businesses that may interest the user based on their location and preferences. Through mobile commerce and local recommendations, it encourages users to explore new businesses and stimulates local spending. Google Maps has had a significant impact on the digital economy in Thailand. It helps businesses increase visibility, interact with customers, and attract foot traffic to their physical locations. It also facilitates mobile commerce, provides local recommendations, and aids the tourism industry. Google Maps contributes to digital domain economic growth, increased sales, and enhanced user experiences by connecting users with pertinent businesses and facilitating efficient navigation.

Analysis of the Impact of Regional Fiscal Policy on Economic Growth in North Sumatra

This study discusses the impact of regional fiscal policy on economic growth in North Sumatra. In this study also carried out the detection of fiscal illusion (flypaper effect) in fiscal policy undertaken by the local government districts/cities in North Sumatra. This study was conducted by analyzing quantitative data, that is, the data provide an overview of events using numbers, which then the results will be compared with theories and empirical evidence of relevant previous research results. The Data used in this study in the form of panel data (pool data). The results of this study showed that local revenue has a positive and significant effect on regional spending, general allocation funds have a positive and significant effect on regional spending, special allocation funds have a positive and significant effect on regional spending, simultaneously local revenue, general allocation funds, special allocation funds simultaneously have a positive and significant effect on regional spending districts / cities, directly local revenue has a positive and significant effect on economic growth proxied by Gross Regional Domestic Product, regional expenditure has a positive and significant effect on economic growth proxied by Gross Regional Domestic Product, Local revenue and local expenditure significantly affect economic growth proxied with Gross Regional Domestic Product and based on the results of research in relation to fiscal illusion from previous research can be mentioned that the fiscal illusion has occurred for a long time and in various regions in Indonesia and even in various regions in other countries. Local governments make the balance funds as the main source of revenue. Keywords: Local Revenue, Local Spending, Unconditional Grant, Growth, And Fiscal Illusion.

Measuring local public expenditure effectiveness using sustainable development goals

PurposeThis paper aims to propose a tool to assess local public expenditure effectiveness based on a framework of alignment between outputs, outcomes and impacts – the Index of Municipal Expenditure Effectiveness (IMEE). This index is composed of a set of indicators associated with the typology of local expenditure.Design/methodology/approachThe paper describes the methodological approach used in the development of the Index, considering the insights from the literature review and the opinion of a panel of experts. The indicators of outcomes and social impacts that are part of the Index are intentionally aligned with the UN Sustainable Development Goals (SDGs) as they provide an essential guide to assess public value creation in the current context. For simplicity purposes, three main components of municipal expenditure were considered, namely Education, Essential Public Services and Local Public Transportation. The Index is then illustrated through a pilot application, using data from five Portuguese municipalities.FindingsThis study argues that measuring the public expenditure effectiveness based on outcome and impact indicators can provide the data needed for local governments to better understand the effects of their activities over time, ultimately assessing their contribution to public value.Practical implicationsAssessing the impact of local spending is important to ensure the best use of public resources. Linking local public expenditures with the 2030 Agenda and the SDGs is a promising avenue to understand up to what extent the application of the public money is contributing to create public value by impacting on citizens’ lives.Originality/valueThe proposed IMEE contributes to addressing a gap identified in public organizations, including local governments, regarding the lack of consideration of expenditure and outcome/impact relationships, and the use of variables to measure long term impacts.

Stimulus or Enforcement? How Intergovernmental Transfers Crowd-in Local Taxes in Indonesia

This study quantifies intergovernmental transfers’ contemporaneous and lagged effects on local tax revenues of districts/municipalities in Indonesia. This study found that transfer as aggregate and unconditional transfers/ Dana Alokasi Umum have crowding-in effects on local tax revenues. Meanwhile, revenue sharing/ Dana Bagi Hasil and conditional transfers/ Dana Alokasi Khusus do not significantly affect the tax revenues of districts/municipalities. In addition, system-Generalized Method of Moments estimation results show that the contemporaneous effects of transfers are more prominent in magnitude than their lagged effects. It indicates that local tax enforcement due to transfers provides a larger portion than the local spending stimulus in determining local revenue increases. Our findings refute the negative stigma that emerged after implementing fiscal decentralization, particularly related to the disincentive effect of transfers on local government efforts to generate their revenues. Therefore, equitably endowing local governments with intergovernmental transfers will improve their accountability and build public trust.

High out‑of‑pocket spending and financial hardship at the end of life among cancer survivors and their families

Cancer is one of the most expensive medical conditions to treat worldwide, affecting national and local spending, as well as household budgets for patients and their families. In this commentary about a recent paper from Tur‑Sinai et al., we discuss the high out-of-pocket spending and medical and non-medical financial hardship faced by cancer patients and their families at the end-of-life in Israel. We provide recent information about the costs of health care in Israel and other high-income countries with (i.e., Canada, Australia, Japan, and Italy) and without universal health insurance coverage (i.e., United States, a country with high healthcare costs and uninsurance rate), and highlight the role of improving health insurance coverage and benefit design in reducing financial hardship among cancer patients and their families. Recognizing that financial hardship at the end of life affects both patients and their families, developing comprehensive programs and policies in Israel as well as in other countries is warranted.

Intergovernmental grants and local public finance: An empirical examination in Israel

What is the overall effect of intergovernmental grants on local public finance? While previous studies show an asymmetric effect of changes in intergovernmental grants on local taxation, other budgetary variables are often neglected. We take advantage of a 2011 Israeli reform in the context of a centralized country, which resulted in reduced intergovernmental grants for some local governments and increases for others, and analyse the overall effect on local spending, taxation, and deficits, using event study and difference-in-differences methodologies. Our results show that grant reductions led local governments to increase local tax rates and their annual deficits, but did not change local spending levels while revealing the mechanism behind rates adjustments. Local governments which experienced an increase in their grants increased their expenditures and lowered their tax rates and deficit levels. We find an asymmetric effect on tax rates: a grant reduction causes a tax hike which is twice as large as the tax reductions following a grant increase. This asymmetric effect can create tax hikes when grants decrease and then increase to their original level. Our results help establish the effect of intergovernmental grants on local taxation, and their effect on expenditure and fiscal balance in a centralized country.

The Relationship of Foreign Direct Investment and Unemployment Rate in the Philippines

Unemployment is widely recognized as a crucial indicator of the country’s labor market performance and is known to be one of the most important problems in developing countries. On the other hand, foreign direct investment is known to significantly impact the country’s economy as it directly creates additional jobs in the local economy and indirectly increases local spending because the new employees purchase products and services. This study was conducted to determine the relationship between foreign direct investment (inflows and outflows) and the unemployment rate in the Philippines and to present its trend from the period 1980 to 2019. Data on foreign direct investment and unemployment rate in the Philippines from 1980-2019 were sourced from International Labour Organization published by the World Bank. The Ordinary Least Squares (OLS) regression analysis was used to analyze and determine the relationship between foreign direct investment and the unemployment rate in the Philippines. Results revealed that the foreign direct investment outflows variable significantly affects the unemployment rate, with p-values lower than the 5% significance level. Thus, this paper offers decision-makers and policy-makers ample information to make informed decisions about the foreign direct investment and unemployment rate in the Philippines.

Does conditioning cash transfers on health treatment harm the health of other families on low incomes who depend on public services? Evidence from Brazil

SummaryMotivationCash transfers have become popular for relieving poverty in the Global South. Many programmes are conditional on beneficiaries complying with medical check‐ups, nutritional assessments, and vaccinations. Such conditions may improve the health of beneficiaries, above all the health of their young children. But often public health provision is strained. Might the increased attention to those getting the transfers reduce health services to non‐beneficiaries, and especially those on low incomes who cannot afford private medicine?PurposeWhat are the impacts of the largest and longest‐lived conditional cash transfer programme in the world, Brazil's Bolsa Família (BF), on the health of non‐beneficiaries living in poverty? Does the health of non‐beneficiaries suffer when BF requirements come into place? Do the health requirements of BF lead to increased administrative costs for local health centres? Do they squeeze remaining resources for health care?Methods and approachSurveys from before and after the creation of BF are used to model the probability of death for infants born into poor households, comparing those enrolled in BF to those not included. The impacts of the BF programme on local health budgets are modelled through regression analysis. The analysis takes advantage of the varying degree of coverage of BF at the level of municipalities across Brazil.FindingsImplementation of BF led to lower risk of death of infants from beneficiary families than predicted by trends before BF, while infants from impoverished non‐beneficiary families developed a higher‐than‐expected risk of death. The benefits to the former group were larger than the harm to the latter group, which explains why BF appears to reduce infant and child mortality in aggregate. The expansion of BF depressed local spending on primary health care. Above all, more of the health budget and staff time was spent on monitoring compliance with health conditionalities.Policy implicationsThe harmful spillovers from BF to the health of low‐income households who were not included in the programme pose questions about the conditions that often accompany cash transfer programmes. In cases like Brazil, where budgets for public health care are limited, unconditional transfers might be preferable. Or, if health conditions are applied to cash transfer beneficiaries, then extra resources need to be granted to health centres to allow them to deal with the increased demand from beneficiaries for services.

The Effects of Fiscal Decentralisation on Publicly Provided Services and Labour Market.

This paper studies how fiscal decentralization affects local services. It explores a 1993 reform that increased the fiscal autonomy of Italian municipalities by replacing government transfers with revenues from a local property tax. Our identification leverages cross-municipal variation in the degree of decentralization that stems from differences in the average age of buildings caused by bombings during WWII. Decentralization reduced local spending but expanded municipal services, such as nursery schools. These effects are larger in areas with greater political competition. The paper also investigates how the reform affected labor markets. Decentralization increased female labor supply-probably through expanded availability of nursery schools- thereby reducing the gender gap in employment.

Ensuring Budgetary Resources at the Level of Local Communities in the Current Social-Economic Context: Evidence for Romanian Municipalities

This paper aims to examine whether the status of fiscal decentralization generates efficiency in local spending behavior and leads to local fiscal performance and local economic growth, revealing not only the status of Romania from the point of vertical fiscal imbalance but also the fiscal implication of spending decentralization and local government effectiveness. The methodological background includes qualitative sequential methodology, involving empiric analysis that provides coherence and viability for our study, but also quantitative methods, including Ordinary Least Squares regression (OLS). The empirical results show that fiscal decentralization determines more responsible and efficient local spending, enhancing local performance and contributing to economic growth. Furthermore, the analysis provides evidence on the importance of local fiscal consolidation and gives an overview in terms of spending responsibilities between the central government and local government. The paper contributes to the literature that studies fiscal imbalance, as well as the fiscal implications of decentralized spending and the effectiveness of local governments in driving economic growth. It also contributes to the literature that studies the relationship between fiscal decentralization and local economic growth, as well as the effectiveness of government reforms and strategies.

War and Welfare in Colonial Algeria

AbstractA distinguishing feature of the modern state is the broad scope of social welfare provision. This remarkable expansion of public assistance was characterized by huge spatial and temporal disparities. What explains the uneven expansion in the reach of social welfare? We argue that social welfare expansion depends in part on the ability of the governed to compel the state to provide rewards in return for military service—and crucially, that marginalized groups faced greater barriers to obtaining those rewards. In colonial states, subjects faced a bargaining disadvantage relative to citizens living in the colony and were less likely to win concessions from the state for their wartime sacrifices. We test this argument using a difference-in-differences research design and a rich data set of local spending before and after World War I in colonial Algeria. Our results reveal that social welfare spending expanded less in communes where the French subject share of the population was greater. This paper contributes to the state-building literature by highlighting the differential ability of the governed to bargain with the state in the aftermath of conflict.

Analisis Efisiensi Pelaksanaan Anggaran Belanja Daerah pada Badan Pengelola Keuangan dan Aset Daerah (BPKAD) Kota Medan

The budget is a financial plan for the future time frame which contains provincial incomes and consumptions, which can portray the public authority’s arrangement to understand and dispense reserves. Great asset the board is a significant component in understanding the use spending plan, for this situation the planning completed and arranged by the provincial government should be thought about suitably and precisely, so the proficiency level increase can be acknowledged true to form. The reason for this study was to decide the degree of efficiency in the execution of the Local Spending plan at the Medan City BPKAD. The strategy utilized in this examination is descriptive research, specifically by gathering all information connected with the acknowledgment of the Local Spending plan which is then ordered, explained, and dissected which can then be finished up. The aftereffects of the review show that the acknowledgment of the Territorial Financial plan at the Medan City BPKAD during the 2020-2021 monetary year has expanded and is classified as efficient with an average percentage of efficiency of 64.56%.
 Keywords: efficiency, realization of Regional Budget

The new image of Saudi cultural shift; MDL Beast music festival; Saudi Vision 2030

Saudi Arabia is introducing new entertainment opportunities and undergoing significant cultural change as part of its new Vision 2030, which aims to diversify its economy away from oil. This will be done by increasing local spending and international tourism. This study seeks to understand how the MDL Beast music festival (held in December 2019 in Riyadh) was utilized by Saudi Arabia to portray its new image to the world through Instagram (a social media site). A mixed-method approach was used for qualitative research that interviewed three of the main MDL Beast festival organizers and analyzed 100 Instagram posts using the framing analysis method. Opening up to the world, positive change, and national pride were the most common frames to promote a new image of Saudi Arabia through the MDL Beast festival. MDL Beast festival sends the message that Saudi Arabia no longer confirms stereotypical conservative perceptions and has been changing.

Creative Clusters and Creative Multipliers: Evidence from UK Cities

Economic geographers have paid much attention to the cultural and creative industries, both for their propensity to cluster in urban settings, and their potential to drive urban economic development. However, evidence on the latter is surprisingly sparse. In this article, we explore the long-term, causal impacts of the cultural and creative industries on surrounding urban economies. Adapting Moretti’s local multipliers framework, we build a new twenty-year panel of UK cities, using historical instruments to identify causal effects of creative activity on noncreative firms and employment. We find that each creative job generates at least 1.9 nontradable jobs between 1998 and 2018. Prior to 2007, these effects seem more rooted in creative services employees’ local spending than visitors to creative amenities. Given the low numbers of creative jobs in most cities, the overall impact of the creative multiplier is small. On average, the creative sector is responsible for over 16 percent of nontradable job growth in our sample, though impacts will be larger in bigger clusters. We do not find the same effects for workplaces, and we find no causal evidence for spillovers from creative activity to other tradable sectors. In turn, this implies that creative city policies will have partial, uneven local economic impacts. Given extensive urban clusters of creative activity in many countries, our results hold value beyond the UK setting.

Rivers, lakes and revenue streams: The heterogeneous effects of Clean Water Act grants on local spending

The Clean Water Act (CWA) funded $167 billion (2020$) in grants to municipal governments for wastewater treatment upgrades. We leverage variation in the timing of grant receipt with a difference-in-differences design to estimate the effect of CWA grants on local spending. On average, each dollar of grant revenue caused a $0.45 increase in sewerage capital spending. Dividing previously estimated benefit-to-cost ratios of CWA grants by this estimate suggests that each CWA grant dollar that municipalities spent on sewerage capital generated an average return of $1.01. In addition to funding grants, the Act set new capital standards for all wastewater treatment facilities in the United States. We show that CWA grants caused a dollar-for-dollar increase in sewerage capital spending up to the amount needed to cover the costs of capital upgrades newly mandated by the CWA, but after municipalities met these capital requirements, or if the capital mandate was not binding, they reduced their own spending on sewerage capital in response to grant receipt. Municipalities then redistributed grant money to local residents by reducing water bills.