Public Expenditure Research Articles

Fiscal autonomy and public expenditure performance: Some panel‐data evidence from Indian states

AbstractThis study examines the impact of fiscal autonomy (FAP) on public expenditure performance across 18 Indian states from 2010–11 to 2019–20. We develop a measure of public expenditure performance using social indicators. We also measure FAP using revenue‐expenditure ratio. Based on system generalized method of moments, the empirical result confirms that a higher FAP given to Indian states is associated with greater fiscal performance. Further, the robustness check reveals that central transfer insignificantly affects the expenditure performance of Indian states.

The impact of national savings on economic development: a focused study on the ten poorest countries in Sub-Saharan Africa

The purpose of this study is to examine the impact of national savings on economic development, as measured by the Human Development Index (HDI), Inequality-adjusted HDI (iHDI), and Multidimensional Poverty Index (MPI), in ten of the poorest countries in Sub-Saharan Africa. The study employs a sequential Generalized Method of Moments (GMM) analysis to address potential endogeneity issues and account for the dynamic nature of the relationships, covering the period from 2009 to 2019. The findings reveal a complex relationship between national savings and the selected development indicators. While national savings exhibit positive impacts on HDI and iHDI, the results are not consistently statistically significant across all the sequential models. However, the analysis suggests that national savings have a positive influence on reducing multidimensional poverty, as measured by MPI, particularly when effectively channeled into productive investments. The study also highlights the significant positive impact of government expenditure and foreign direct investment (FDI) on human development, underscoring the importance of strategic public investments and foreign capital. The results suggest that while national savings are crucial, their effective utilization is essential for enhancing human development indices. Strategic investments in public goods and foreign capital are also important. The mixed effects of inflation and official development assistance (ODA) emphasize the need for stable economic policies and effective utilization of foreign aid. The modest positive impact of institutional quality suggests that improvements in governance and institutional frameworks can contribute to human development. The findings underscore the need for policies promoting financial inclusion, efficient public expenditure, foreign direct investment, and stable macroeconomic conditions to leverage national savings for economic development. The study’s findings provide valuable insights for policymakers in Sub-Saharan Africa, highlighting the need for comprehensive strategies that leverage national savings, public expenditure, and foreign investment to drive sustainable economic development and poverty reduction.

EFFECT OF SUBNATIONAL PUBLIC EXPENDITURE ON STATES’ FISCAL SUSTAINABILITY IN NIGERIA

Objectives: The study examined the effect of subnational public expenditure on states’ fiscal sustainability in Nigeria. Specifically, the study examined the effect of capital expenditure and recurrent expenditure on states’ fiscal sustainability in Nigeria. Methods Ex-post facto research design was adopted to carry out the research for the period 2016-2022. The panel data were collected and sourced from Audited Financial Statements of subnational, CBN statistical Bulletin, CBN Annual report and accounts, other CBN publications, publications of the National Bureau of Statistics (NBS), and Ministry of Finance (MOF) Medium Term Fiscal Framework and other publications of 36 states. Panel regression was used to analyse the hypothesis significant effect between subnational public expenditure and states’ fiscal sustainability in Nigeria with the aid of E-views 12. Results: The study found that capital expenditure has a significant effect on states’ fiscal sustainability in Nigeria. The study also found that recurrent expenditure negatively affects states’ fiscal sustainability in Nigeria. Conclusion: The study recommends that the state governments of Nigeria should adhere strictly to the implementation of capital expenditure so as to increase the level of infrastructural and productive base in Nigeria which will have the capacity to stimulate economic growth and create employment. Also, state governments should decrease spending, particularly regarding recurrent expenditure, to reduce the cost of governance in the country. This is because our results indicated that an increase in government recurrent expenditure reduces the level of the sustainability index.

Government spending in the agricultural sector: Optimal ratio with lending and the impact on the agricultural production

An effective government agropolicy should be balanced: To reduce the state budget pressure, it is important to reduce public spending and encourage farmers to use agricultural loans. Reducing public spending should not lead to a shortage in the agricultural market. The paper aims to substantiate the directions of government agropolicy transformation based on the optimal ratio of public expenditures and loans in the agrosector and the dependence of agroproduction dynamics on state financing. The research base is data from 10 countries with different income levels (World Bank), presented in FAOSTAT for 2004–2021. For each country, the optimal (determined by the structural modeling method) and actual proportions between state financing and lending in the agrosector are compared, adjusted for the agroproduction index. The modeling showed that the share of public funds should increase in Germany, Israel, Italy, and the UK and decrease in Azerbaijan and Georgia; the current proportion is optimal in the USA, Russia, Turkey, and Ukraine. Based on a panel regression model with fixed effects, the influence of the actual level of state agrofinancing on the FAO Production Indices of the main types of agroproducts was determined. It is the largest for crops, meat, and milk (a decrease in state funding by USD 1 million threatens to reduce the respective indices by 4.5, 3.47, and 3.79 points), medium for cereals and sugar crops (according to points 2.69 and 2.11), and the smallest for livestock and non-food products (by 1.53 and 0.001 points, respectively).

Analysis of the Relationship Between Fiscal Policy and Economic Security in Iraq

This research analyzes some indicators of fiscal policy, specifically focusing on public expenditure, government revenue, and the general budget balance. It also examines certain indicators of economic security, including the average GDP per capita, agricultural GDP, and non-oil GDP, in an attempt to measure the extent of influence and the role that these policies could play in achieving economic security during the years 2004 to 2021, particularly after the establishment of the political system in Iraq.Through study, analysis, and the use of quantitative methods in processing, the research reveals a disparity between the trajectories and orientations of fiscal policy and the achievement of economic security in Iraq. Fiscal policy has often been centered on the reliance on a single quarterly resource, namely oil revenues, resulting in the economy's persistent dependency and vulnerability to fluctuations in the global economy. This situation has had negative or positive implications for the living standards of Iraqi citizens

The Impact of Public Expenditure on Inflation: An ARDL Approach

The aim of this study is to investigate and evaluate the impact of public spending on inflation in Algeria from 1973 to 2022. The data used are obtained from the official website of world Bank (WDI) and the Finance Ministry of Algeria. This study is conducted by applying the Auto-Regressive Distributed Lag model (ARDL)-(bounds testing approach) using eviews13 software. The time series of the data were subjected to statistical tests by applying the Augmented Dickey-Fuller (ADF) test. The cointegration tests were also applied for a common relationship and the Model Stability: The Bounds Test for confirming the existence of a stable long-term relationship, the Breusch-Godfrey serial correlation LM test to test the absence of serial correlation, Test Breusch-Pagan-Godfrey to test the Heteroskedasticity; and the CUSUM and CUSUM Squares test for the stability of the model as well as the estimation of the model’s short- and long-term parameters. The results obtained confirm the hypothesis posed in the introduction on the existence of a cointegration relationship between public expenditure and inflation the indicate that there exists a cointegration relationship between public expenditure and inflation, such that a 1% increase in public spending leads to a 0.23% rise in the inflation rate. It is important to mention that this percentage is relatively low compared to the short term, having reached 2%. As regards the other control variables, we found a positive and statistically significant correlation between the inflation rate and the percentage of broad money to GDP and the percentage of imports to GDP. However, we found an inverse relationship between the inflation rate and GDP per capita at constant 2015 prices, which serves as a measure of inverse economic growth. Based on these results, we can suggest Moving forward, policymakers in Algeria must prioritize measures aimed at curbing inflation while ensuring sustainable economic growth. This may involve reassessing public spending priorities, implementing effective monetary policies, and enhancing fiscal discipline. Furthermore, fostering economic diversification and promoting investment in sectors with high growth potential can contribute to reducing reliance on public expenditure as a driver of inflation.

Topical dynamics of terrorism from a global perspective and a call for action on global risk

Research on terrorism is a sensitive and critical aspect globally from a security perspective that calls for an action policy. Since 9/11, terrorism has been considered a high risk or a disaster for global governance without geographical exceptions. Its association with political and economic and the severity of causalities it causes leaves a worrisome and long-lasting impact on global cohesion and peacefulness, just like a natural disaster would. This study unveils the political and policy measures, public expenditures, and likely external intervention determinants and their association with terrorism in the panel data of 151 countries from 2012 to 2022. The statistics of SGMM say that political stability is the most impactful and significant factor in reducing terrorism globally. External intervention from political agencies and economic forces is the second-most influential factor in mitigating terrorism incidents. The study further observes that the effectiveness of counter-terrorism measures and policy implementation has proven less impactful in mitigating terrorism. The innovative findings of this study state that government expenditures toward basic facilities are impactful in deterring terrorism but do not have a significant role in global analysis. The study recommends that the EU and America should collaborate and work on Asian and African regional security, rather than invade state security and sovereignty as part of their collective measures of counter-terrorism. A collaborative effort helps eradicate external evil forces or groups and sustain the state and global peace.

Determinants of Public Expenditure on Education in India: An Empirical Analysis

Determinants of Public Expenditure on Education in India: An Empirical Analysis

Investigating the compliance behavior of GST taxpayers: An extension to theory of planned behavior

The government around the globe are striving to improve their public finance to meet their public expenditures and for sustainable development of their economies. However, the capability of the governments to generate adequate revenue is limited and refrained by numerous factors. The non‐compliance behavior of GST taxpayers is one of the major factors attributed to this phenomenon. Therefore, this paper endeavors to frame and validate a comprehensive instrumental scale with the application of the extended Theory of Planned Behavior (TPB) for analyzing the determinants of compliance behavior of GST taxpayers in India. The current study has adopted the quantitative design through exploratory and confirmatory studies by incorporating qualitative semi‐structured interviews with 100 GST consultants to validate the instrumental scale. The study has collected a random sample of 339 GST taxpayers using snowball random sampling. Meanwhile, the study has employed the Exploratory Factor Analysis (EFA) and Confirmatory Factor Analysis (CFA) for analyzing the collected data. The result affirms six major factors in determining the compliance behavior of GST taxpayers explaining 65.166% of the total variance. The findings have instituted perceived complexity, trust and moral obligation in addition to three major constructs of TPB theory namely attitude behavior, subjective norms and perceived behavioral control of the GST taxpayers. The results explicate that the compliance behavior of GST taxpayers is a dynamic and multifaceted phenomenon and it is critical for GST authorities to comprehend the compliance behavior of GST taxpayers. The result explicates that there is a need to simplify and rationalize the GST system in India to increase voluntary compliance of taxpayers. The results also endorse for building trust between GST taxpayers, GST authorities and the state. This study may act as a baseline for formulating policies and strategies on GST in India. There is hardly any national and international study that has applied the extended theory of planned behavior for studying the antecedents of compliance behavior of GST taxpayers.

Recruiting refugees to reduce labour shortages in health care professions: experimental evidence on the potential of foreign-language outreach on social media

BackgroundMany high-income countries are grappling with severe labour shortages in the healthcare sector. Refugees and recent migrants present a potential pool for staff recruitment due to their higher unemployment rates, younger age, and lower average educational attainment compared to the host society's labour force. Despite this, refugees and recent migrants, often possessing limited language skills in the destination country, are frequently excluded from traditional recruitment campaigns conducted solely in the host country’s language. Even those with intermediate language skills may feel excluded, as destination-country language advertisements are perceived as targeting only native speakers. This study experimentally assesses the effectiveness of a recruitment campaign for nursing positions in a German care facility, specifically targeting Arabic and Ukrainian speakers through Facebook advertisements.MethodsWe employ an experimental design (AB test) approximating a randomized controlled trial, utilizing Facebook as the delivery platform. We compare job advertisements for nursing positions in the native languages of Arabic and Ukrainian speakers (treatment) with the same advertisements displayed in German (control) for the same target group in the context of a real recruitment campaign for nursing jobs in Berlin, Germany. Our evaluation includes comparing link click rates, visits to the recruitment website, initiated applications, and completed applications, along with the unit cost of these indicators. We assess statistical significance in group differences using the Chi-squared test.ResultsWe find that recruitment efforts in the origin language were 5.6 times (Arabic speakers) and 1.9 times (Ukrainian speakers) more effective in initiating nursing job applications compared to the standard model of German-only advertisements among recent migrants and refugees. Overall, targeting refugees and recent migrants was 2.4 (Ukrainians) and 10.8 (Arabic) times cheaper than targeting the reference group of German speakers indicating higher interest among these groups.ConclusionsThe results underscore the substantial benefits for employers in utilizing targeted recruitment via social media aimed at foreign-language communities within the country. This strategy, which is low-cost and low effort compared to recruiting abroad or investing in digitalization, has the potential for broad applicability in numerous high-income countries with sizable migrant communities. Increased employment rates among underemployed refugee and migrant communities, in turn, contribute to reducing poverty, social exclusion, public expenditure, and foster greater acceptance of newcomers within the receiving society.

Modelling the Relationship Between Public Expenditure, Tax Revenue and Economic Growth in Türkiye Using the AARDL Approach

This study aims to investigate the macroeconomic impact of fiscal policy in Türkiye, where fiscal policy faces several challenges. Using annual time series data from 1980 to 2021, we examine the impact of tax and public expenditure subcomponents on GDP using the augmented autoregressive distributed lag (A-ARDL) bound test approach proposed by Sam et al. (2019). The A-ARDL test results indicate that tax revenue has a positive impact on economic growth in the short run, while tax revenue has a negative impact on economic growth in the long run. Furthermore, we conclude that increases in current and investment expenditures have a positive impact on economic growth in the short and long run, while increases in transfer expenditures have a negative impact on economic growth in the short run.

Oral Hygiene Practice of Geriatric Patients Attending Outpatient Department of a Tertiary Dental Hospital in Chennai, Tamil Nadu: A Descriptive Study

Abstract Background: Increasing disease burden will elevate public health expenditures having an impact on the economy. Literatures confirm a low utilization rate of dental services and a high oral health disease burden among elders which is regarded as a heterogeneous population in India. There is long term existence of high prevalence of oral diseases. Oral health educational intervention is the most cost effective method as it has a positive impact on the oral hygiene status to prevent oral diseases. Successful oral health educational interventions need planning which requires information regarding oral hygiene practices of the population so that appropriate information education and communication content with mention about the pros and cons of the aids which are professionally recommended and those commonly used respectively could be developed to enhance oral health promotion. Aim and Objectives: The aim of the study was to learn the oral hygiene practices among geriatric dental patients in Chennai. Materials and Methods: An interview was conducted for 250 consented patients aged ≥60 years selected on a convenient sampling technique. Results: The results were analyzed using frequencies from the coded data. Conclusion: Majority of the geriatric dental patients were found to be practicing insufficient oral hygiene with aids which are usually not professionally recommended. The reported dental problems of the elders could be attributed to inadequate and improper oral hygiene practices which necessitate transition in the oral health attitude as the need of the hour strategy through urgent comprehensive oral care educational interventions.

Impact of Rapid Economic Development with Rising Carbon Emissions on Public Health And Healthcare Costs in Bangladesh

Background: Bangladesh, a rapidly developing country, is experiencing a critical phase where economic growth and environmental sustainability must be balanced. The swift industrialization and urbanization have led to increased energy consumption and carbon emissions, negatively impacting public health and healthcare expenditures. This study determined the intricate relationships between healthcare expenditure and its determinants—economic growth, CO2 emissions, urbanization, and natural resource use—in Bangladesh. Methods: Utilizing a dataset from 2004 to 2023, this study applies advanced econometric methods, including the dual adjustment approach, spectral causality, fully modified ordinary least squares (FMOLS), dynamic ordinary least squares (DOLS), and canonical cointegrating regression (CCR). Results: Results demonstrate a significant positive correlation between economic growth, urbanization, natural resources, and CO2 emissions on healthcare spending. The findings underscore that CO2 emissions and urbanization are substantial contributors to rising healthcare costs, while natural resources and economic growth present varying impacts based on different econometric models. The dual adjustment approach provides robust evidence of cointegration, revealing the long-term interactions among these variables. Conclusion: In conclusion, the study emphasizes the urgent need for effective national policies to mitigate healthcare costs driven by environmental degradation and economic growth. By understanding these relationships, policymakers can better manage health expenditures while promoting sustainable development in Bangladesh. The research highlights the necessity of integrating environmental and health policies to achieve a balanced growth trajectory.

Model of performance indicators for the evaluation of state public health expenditures in Brazil

Objective: To present a proposal on a set of performance indicators that can be used in audits of state audit courts to assess the effectiveness of budget spending on public health. Methodology: This is quantitative research, with the application of statistical techniques related to Data Envelopment Analysis (DEA) in two stages and estimation of linear longitudinal regression models for strongly balanced short panel data, on the budget expenditures made in the period from 2015 to 2019 by the States and the Federal District on public health. Results: It was found that there is no use of performance indicators in the elaboration and execution of Multi-Annual Plans (MAPs) by governments to evaluate the effectiveness of spending on public actions; that the mention of "performance indicators" refers exclusively to percentages to compare what was accomplished in relation to what was predicted; that records of duplicate public actions were found in the MAPs by some entities, and that overvaluation was identified in the records of the resources provided for in most of the MAPs. The degree of statistical explanation of the proposed set of indicators reached an average of 87% of statistical confidence. None of the public entities was 100% effective in the expenditures made. 69% of the auditors of the Courts of Auditors legitimized the set of indicators proposed to evaluate the effectiveness of state public health spending. Finally, it is concluded that the proposed performance evaluation indicators can be used to verify the effectiveness of state public health spending. Contributions of the study: It presents performance indicators, created by means of a statistical method, to evaluate the effectiveness of spending on state public health, since the specialized literature indicates little or no discussion about it. It indicates that the actions included in the MAPs are not audited by the courts of auditors and that the legislative branch is silent in the supervision between what is foreseen and what is carried out, considering that there are repeated and overvalued actions.

‘Two sides of the same coin’? A longitudinal analysis evaluating whether financial austerity accelerated NHS privatisation in England 2013-2020

ObjectivesTo understand the relationship between increasing privatisation of the NHS and austerity cuts to public funding.DesignLongitudinal analysis.Setting170 Clinical Commissioning Groups (CCGs) in England between 2013 and 2020.InterventionThe UK austerity programme,...

The matter of public expenditure on different levels of education for economic growth in EU countries

The matter of public expenditure on different levels of education for economic growth in EU countries

The use of the joint simultaneous integration methodology to measure the impact of certain macroeconomic variables on the GDP: ARDL model

Purpose. The objective of this study is to analyse the evolution of public expenditure, exports, imports, and gross domestic product (GDP) in Algeria over the past four decades (1980–2022). It aims to measure the impact of each of these macroeconomic variables (public expenditure, imports, and exports) on GDP during the study period, in the long and short term. Additionally, the study intends to identify the most significant economic variables influencing GDP in Algeria by constructing an econometric model (autoregressive model) based on economic theory and previous studies. These variables are considered the driving force and effective activator for improving GDP. Results. The findings obtained using the ARDL bounds testing approach for cointegrated time series revealed the existence of a long-run equilibrium relationship between the independent variables (public expenditure, imports, exports) and the dependent variable (GDP). In the short run, most of the model variables were statistically significant, indicating their influence in explaining GDP. This allows us to conclude that there is a dynamic relationship between the model variables in Algeria during the study period. Additionally, the error correction coefficient was statistically significant at the 5 % level, while the speed of adjustment to equilibrium was 0.8828. Scientific novelty. Research in this field continues to provide new insights into the dynamic relationship between these important economic factors. While this topic has been explored in previous studies, our research distinguishes itself by examining the collective impact of public expenditure, imports, and exports on GDP. This study establishes a direct link between these variables and GDP. Modern studies emphasise the significance of the composition of public expenditure in determining its impact on GDP. Additionally, several studies have demonstrated the influence of exports and imports on GDP. Imports play a crucial role in enhancing production efficiency and reducing costs within the economy. The current study addresses the gap in previous research by simultaneously examining public expenditure, imports, and exports as independent variables, considering both the pre- and post-Algerian economic reforms period. Practical value. This study contributes to understanding economic growth trajectories and how various economic components impact GDP. By analysing the influence of public expenditure, exports, and imports on economic growth, the study offers significant added value. It empowers policymakers at the macroeconomic level to leverage these findings in formulating and implementing effective economic policies that can enhance GDP, thereby promoting economic growth and improving living standards through the management of the study variables such as public expenditure, export values, and imports.

The Impact of Economic Factors on Public Health Expenditure in Türkiye: Principal Component Analysis Evaluation for the Period 2002-2022

This study analyzes the economic factors affecting public health expenditure in Türkiye from 2002 to 2022. The main objective is to identify the economic reasons for the decreasing share of public health expenditure in Gross Domestic Product (GDP). It examines macroeconomic variables such as GDP per capita, unemployment rate, labor force participation rate, consumer price index, tax revenue, and exchange rate using principal component analysis (PCA). The results show that GDP per capita, exchange rate, and tax revenue significantly impact public health expenditure, indicating a direct relationship between economic growth and health spending. The unemployment rate does not directly affect public health expenditure, while an increase in labor force participation rate can reduce it. This study underscores the importance of macroeconomic stability and effective economic policies for sustainable health financing in Türkiye. By using long-term data, it provides a comprehensive analysis of how economic factors impact health expenditure, distinguishing it from other studies in the literature. The findings emphasize that a healthy economy leads to increased public investment in health services.

SEVERITY OF JOBLESS GROWTH IN INDIA AND THE RELEVANCE OF SERVICE SECTOR IN EMPLOYMENT GENERATION

This is a phase when the whole world is facing unemployment. But India is troubled by structural unemployment since independence and the severity has intensified after opening up the economy in 1991. All the academics, politicians and policymakers have been anxious to get a cure of this problem. But the problem is multi-dimensional in India and correlated with different factors like education, skills, demographic pattern, gender, public expenditure and the disparity of different sectors. Therefore, it is hard to get a unique solution to this problem. Here the present study has tried to demonstrate the unemployment pattern and the wage share of the different sectors. On the basis of secondary data from different sources, the present study has tried to forecast the unemployment pattern in different states of India. The study has shown how the service sector can boost employment among the uneducated, unskilled population also.

PUBLIC INVESTMENT, ECONOMIC GROWTH AND EFFICIENCY

The definition of public investment is not as clear and precise as it may seem. Often, public investments are described as public expenditures that contribute to the stock of physical capital, encompassing tangible assets such as properties (excluding land), buildings and other structures (e.g., roads, airports, hospitals, schools, telecommunication structures, government buildings, bridges, etc.), machinery, transportation equipment, and intangible assets like intellectual property (OECD, 2016). Therefore, public investment is the allocation of funds that result in the growth of the aforementioned items. Public investment can be viewed as a political tool in the hands of a government, capable of altering or determining the course that a country's economy and other aspects of life will take. Governments utilize public investments to respond to a variety of challenges over time, addressing global issues such as climate change and local problems like periods of economic decline, diverse demographic trends, rapid urbanization, or adaptation to new technologies. As emphasized by the European Investment Bank, "properly functioning infrastructure networks are the backbone of flourishing economies" (European Investment Bank, 2010). Public investments are integral for economic and social prosperity, contributing to the national capital stock by allocating resources to essential basic infrastructure, education, research and development, thereby leading to increased productivity and improved living standards. The aim of this article is to analyze the role of public investments in the economy in addressing contemporary challenges.