Public Liabilities Research Articles

Functions of taxes and other public liabilities. Can thefiscal function be performed by remuneration received bycompanies with State Treasury participation on the basisof civil law relations?

The scope of the functions of taxes and the entire tax system has not been precisely defined by the Legislator.Both fiscal and non-fiscal goals/functions are implemented by the tax system. Ensuring budget revenues to fulfillthe redistributive function is the foundation of the tax law system. On the other hand, all tax law norms also fulfillmany other functions, including: stimulation, development, protection, social or political. However, the indicatedfunctions are implemented by general legal norms, in particular public law – tax law, through public finance ties and units. Constitutional guarantees regarding the manner and procedure of shaping tax law provisions ensurethe security of citizens/taxpayers with regard to public law obligations. The statutory exclusivity in shaping taxesand other public levies provides a guarantee for counteracting the authoritarian imposition of „universal financialobligations” on citizens (entities from the sphere of private l aw).The issue to be analyzed is to determine whether fiscal and non-fiscal functions can be entrusted by the State toentities from the sphere of private law – including: commercial law companies with State Treasury participation.The actual entrustment of such functions would take place outside parliamentary control and without regard tothe requirements and regulations applicable to public finance entities and units. Additionally, the takeover and,consequently, the implementation of non-fiscal functions (e.g. stimulating or political) by commercial law companieswould be in violation of the provisions regulating business activity and the standards regulating the functioningof commercial law companies.In practical terms, the way civil law relations are shaped by companies with State Treasury participation, whichactually implement State monopolies, may result in the imposition of general, additional, economically unjustifiedfinancial burdens on citizens and private entities.

Legal nature of the firefighter’s equivalent

The article concerns the legal nature of the cash equivalent as a benefit paid to firefighters of the Volunteer FireDepartment for participating in a rescue operation, rescue operation, training or exercise. This benefit was grantedto members for rescue activities in order to show gratitude for risking life and health to save other people,property and the environment by performing work identical to that of professional firefighters without receivingremuneration. This article presents legal regulations regarding the concept and conditions of payment of thebenefit in question, as well as regulations regarding exemptions from the collection of public law liabilities, compensationfor lost earnings and waiver of the right to obtain an equivalent. Due to the multi-faceted nature of thebenefit in question and the narrow regulation, it is necessary to supplement the knowledge with developed thesesof case law, in particular regarding the calculation of compensation for breaks in training, remaining in combatreadiness, the time of arming the vehicle and securing mass eve nts.

Fiscal implications of the populist radical right in power

ABSTRACT Fiscal preferences of populist radical right parties (PRRPs) typically entail a combination of lower tax rates and the maintenance of costly social spending categories, such as pension spending. Theoretically, this combination is doomed to inflate future public liabilities. In our mixed method study, we assess whether PRRPs in government indeed systematically cause higher deficits and to what extent the combination of tax and social policy explains their public finance. We theoretically discuss the evolution of tax policy and welfare preferences of PRRPs and contend that radical right fiscal preferences are driven by PRRPs’ ideological core claim of ‘native producerist deservingness’. Based on mixed effects models with entropy balanced weights, we show that PRRPs in government have significantly and substantially higher public deficits than governments without PRRPs and similar socio-economic starting conditions. This effect, however, is different in Eastern Europe, where PRRPs in government produce comparatively lower deficits, albeit signalling and implementing the same policy-mix as Western PRRPs. We trace the causes of the differences in outcome with an in-depth case study of the Fidesz government in Hungary from 2010 to 2014.

A financial frontier for Catalonia: nationalism in times of austerity

ABSTRACT During a period of pro-independence mass mobilizations and diminishing financial confidence, the government of Catalonia attached a traditional idea of the rural household to its market in public debt. This article analyzes how nationalistic understandings of household are mobilized to support the struggle for independence and promote austerity policies. It also examines how an ethos of Catalan kinship drives the expansion of the household frontier of finance into the political imagination of the nation. The ethnographic story of this article is about a bond that transferred 30 percent of the region’s public liabilities from institutional investors to Catalan households between 2010 and 2014. I trace out the commercial life of this bond from government offices to bank branches to a small rural town near Barcelona. This approach to financialization shows that the reconstitution of the household as another sphere of market relations has been reoriented after the 2008 financial crisis. My main argument suggests that the financialization of the household in Spain facilitates the making of a financial frontier for Catalonia in which widespread fiscal discontent is transformed into political capital.

공기업의 구분회계 도입은 부채를 감소시켰는가?

[Purpose] The purpose of this study is to verify the effectiveness of Segment accounting introduced by the government for the efficient debt management of public corporations. More than six years after the government introduced Segment accounting system for public corporations, it is meaningful to empirically analyze the relationship between the Segment accounting and debt management of public corporations.
 [Methodology] The government applies the debt ratio as a debt management measure to measure the effectiveness of Segment accounting for public corporations, and public corporations' financial liabilities are important liabilities that account for 67 to 88% of total liabilities. This study measures whether the debt ratio is improved in preparation for before and after the introduction of Segment accounting. In addition, regression analysis is conducted to measure the difference in the effectiveness of Segment accounting between the types of public corporations (market type and semi-market type).
 [Findings] According to the analysis results, there was no change in the rate of decrease or increase in the debt ratio of public corporations after the introduction of Segment accounting.
 However, the rate of increase in the financial debt ratio of public corporations appears to have slowed, and it is judged that the effect of Segment accounting is recognized in the sector.
 There are differences between types of public corporations in slowing the rate of increase in the financial debt ratio, and the market type was found to be more effective than the semi-market type. This is judged to have a large self-adjustment ability in the operation of public corporations because market-type public corporations have been listed on the stock market or have relatively little government control.
 [Implications] This study is significant in that it confirms the effect of Segment accounting of public corporations through empirical analysis. The government applies only the debt ratio as a debt management measure of public corporations. However, since the most important part of public corporations' liabilities is financial liabilities, it is judged that if the ratio of financial liabilities is added and applied, it can be more effective in managing public corporations' liabilities.

THE PUBLIC DEBT PHENOMENON IN FISCAL SUSTAINABILITY, AND FINANCIAL DEVIATIONS IN SELECTED OECD COUNTRIES

In this study, we attempt to put forth the sustainability phenomenon, an empirical that occurs a significant fiscal impact on developing countries, which aim to reach the desired economic growth levels. Sustainability of public fiscal balances, especially in terms of debt policies, refers to a structural impact mechanism that means paying debts without default and restructuring them without risk in a period when the payment and redemption deadlines have come, especially in terms of external debts. This mechanism of influence is also expressed in the restructuring of a financial process, which can be expressed in different values, especially in developing countries, and whether the defaulted public liabilities refer to the later debt phenomenon. In this respect, public fiscal sustainability means that the real level of future primary surpluses is equal to the current real value of the public debt at a fundamental level. In our analytical study, the four countries were taken as the basis and the analytical values of these four countries in the financial balances were determined as emerging economies on the basis of these selected countries as Turkey, Poland, Chile, and Mexico. Besides, based on debts and public deficits, this fact also means a sustainable fiscal structure that can emphasize all kinds of debt phenomena at different levels, especially local governments, and the central government throughout the country. In addition, a debt obligation covering the entire public sphere also expresses sustainability in the narrow sense, representing the central government budget, which is essential in terms of sustainable budget balances. On the other hand, the sustainability of debts in developing countries where foreign public debt is in question, especially the public debt of central banks, can also lead to unexpected financial weakness and vulnerabilities. The policies as public borrowing instruments can create uncertainty about the level of financial-institutional impact in terms of future principal and interest payments and negatively affect fiscal policies sustainability. In this context, the acceptability of this fiscal process regarding the receivables of all institutions such as private bondholders, banks, and the World Bank is accepted as the sustainability of the debts in an ongoing process with mutually positive financial formations. When countries demand debt from financial markets, they have to maintain their fiscal sustainability regarding whether they should retake financial risks, especially in developing countries. This approach, which can also be expressed as the stability of debts, also puts forward a position identical to the expectations of stable ground for developing economic growth potential and financial infrastructure.

An analysis of the success of fiscal adjustment in reducing public debt: Evidence from Pakistan.

This study seeks answers to questions such as: what is fiscal adjustment? Which fiscal strategy will result in a reduction in public debt liabilities? In the pursuit of answers to these questions, the study has defined two objectives. Firstly, the fiscal adjustment episodes must be identified in order to detach the discretionary fiscal stance; secondly, the success of these adjustment episodes in reducing public debt liabilities must be assessed. As a result, attempts will be made to undertake analyses that would simplify the issues underlying Pakistan’s practical policy options. A total of eleven adjustment episodes have been observed in a sample, ranging from 1976 to 2017, following Alesina and Ardagna’s definition. The descriptive analysis reveals that five episodes succeeded in reducing the public debt, while six episodes failed to reduce the ratio. Out of the five successful episodes, four are found to be spending-based and one is tax-based. To quantify the success of fiscal adjustment, the empirical model has been calibrated on Leibrecht and Scharler’s model and estimation is done via both the Ordinary Least Squares (OLS) and Robust Least Squares (RLS) methods. The RLS method produces better outcomes than the OLS method. Under RLS, all variables are significant except GDP growth, whereas in the OLS model, the election year and regime shift, together with GDP growth, are statistically insignificant. The fiscal adjustment’s composition reveals that spending-based consolidation boosts the chances of the fiscal adjustment’s success. Fiscal authorities should, therefore, adopt spending-based austerity measures to ensure the sustainability of public finances and prevent the negative macroeconomic consequences of unsustainable public debt.

An analysis of the linkages among fiscal vulnerability, financial stress and macroeconomic policies: an econometric study

PurposeThis study aims to analyze the imbalances in the public finance structure of Pakistan’s economy and highlight the need for comprehensive reforms. Specifically, it aims to contribute to the empirical literature by analyzing the relationship between fiscal vulnerability, financial stress and macroeconomic policies in Pakistan’s economy between 1971 and 2020.Design/methodology/approachThe study develops an index of fiscal vulnerability, an index of financial stress and an index of macroeconomic policies. The fiscal vulnerability index is based on the patterns of fiscal indicators resulting from past trends of the selected variables in Pakistan’s economy. The financial stress in Pakistan is caused from the financial disorders that are acknowledged in the composite index, which is based on variables with the potential to indicate periods of stress stemming from the foreign exchange market, the securities market and the monetary policy components. The macroeconomic policies index is developed to analyze the mechanism through which fiscal vulnerability and financial stress have influenced macroeconomic policies in Pakistan. The causal association between fiscal vulnerability, financial stress and macroeconomic policies is analyzed using the auto-regressive distributive lags approach.FindingsThere exists a long-run relationship between the three indices, and a bi-directional causality between fiscal vulnerability and macroeconomic policies.Originality/valueThis study contributes to the development of a fiscal monitoring mechanism, which has the basic purpose of analyzing the refinancing risk of public liabilities. Moreover, it focuses on fiscal vulnerability from a macroeconomic perspective. The study tries to develop a framework to assess fiscal vulnerability in light of “The Risk Octagon” theory, which focuses on three risk components: fiscal variables, macroeconomic-disruption-associated shocks and non-fiscal country-specific variables. The initial contribution of this work to the literature is to develop a framework (a fiscal vulnerability index, financial stress index and macroeconomic policies index) for effective and result-oriented macro-fiscal surveillance. Moreover, empirical literature emphasized and advised developing countries to develop their own capacity mechanisms to assess their fiscal vulnerability in light of the IMF guidelines regarding vulnerability assessments. This study thus attempts to fulfill the said gap identified in literature.

A vicious cycle: Fiscal intervention, pension underfunding, and instability in (re)making racialized geographies

The 2008 financial crisis had profound impacts on government finances across the United States, including a lasting decrease in public pension funding levels. Today state and local governments in the United States have trillions of dollars in unfunded public pension liabilities, and the financial condition of pension systems has material impacts on borrowing costs, service delivery, and taxation, as well as retirement security. Local governments have been tasked with shoring up their pension systems while also grappling with sluggish revenue recovery, a situation that compounds already existing fiscal issues. Building on extant scholarship on crisis, austerity urbanism, and pragmatic municipalism, we examine the practice of “shorting” pension systems among Illinois municipalities and a state law meant to strengthen the fiscal health of local pension systems by curbing that practice. Using the case of the City of Harvey, a suburb of Chicago, we show how municipal finance and seemingly neutral policies aimed at ensuring fiscal health can trigger austerity actions that deepen fiscal stress for racialized communities. By examining Illinois’ pension fund landscape and proposing avenues for further research, we contribute to larger conversations about how governance, property, and pensions are inextricably intertwined with persistent racial inequality.

Mexico: Technical Assistance Report-Strengthening Public Assets and Liabilities Management

Mexico: Technical Assistance Report-Strengthening Public Assets and Liabilities Management

The paradox of building bridges: Examining countervailing effects of leader external brokerage on team performance

SummaryLeaders' positions as external brokers in organizational networks—those acting as a bridge between individuals outside the boundaries of their team—can enhance or constrain their effectiveness. Yet, whereas extant research on network brokerage views it as a private good whose benefits accrue directly to the broker, recent research suggests brokering between external communities can serve as both a public good as well as a public liability that can spillover to team members. We integrate network leadership theory with the externalities of network brokerage perspective to examine the countervailing effects of leaders' external brokerage in an information network with peer leaders and executives on team performance. In a sample of 465 team members in 80 teams distributed across 10 sister companies within one conglomerate, we used multilevel structural equation modeling to test our hypotheses. On one hand, we found that leader external brokerage was positively associated with team performance through team members' perceptions of organizational support; on the other hand, we found that leader brokerage is detrimental to team performance by compromising leaders' commitment to their teams. Our results suggest that, while leaders are encouraged to forge connections outside their team to harvest social capital benefits, there are both public benefits and liabilities of team leaders' external networks that can impact team performance.

The Wealth of Our Commonwealth: Money and Capital in the Productive Republic

There is a share of the investment capital available in any society that is generated by the public. In contemporary societies with well-developed payments systems and effective public governance, this share tends to grow large in comparison to that originated by non-public sources. For the latter is intermediated and thus must be pre-accumulated, while the former is generated and is the source of what is accumulated. In spite of these truths, the US outsources management of its public capital stock to private sector financial institutions. This is a practice which a host of under-appreciated collective action predicaments endemic to decentralized market exchange, most of them recursive and hence iteratively self-worsening without limit, ensures will result in misallocation and, therefore, poor modulation of credit aggregates as well. What is needed to draw public capital out of bubble-inflation and back into productive investment is to bring it back under public management, a project for which the present exposition provides a full architecture. This architecture is modeled as a stylized public balance sheet, taking the US Treasury and Federal Reserve System as consolidated case study. Public liabilities take the form of Democratic Digital Dollars issued through interest-bearing digital Business and Citizen Wallets. Public assets take the form of public credit extended by Treasury’s Federal Financing Bank (‘FFB’) and a newly ‘Spread Fed’ only for productive, not speculative, projects. A National Reconstruction & Development Council (‘NRDC’) and Price Stabilization Fund (‘The People’s Portfolio’) complete the picture, respectively affording democratic guidance as to what counts socially as ‘productive’ and collaring volatility among Systemically Important Prices and Indices (‘SIPIs’). Our public capital stock is a public resource in need of public management, which must be managed productively by and for the community.

On Russia’s public sector debt

The article examines the problem of comprehensive official reporting on public sector debt. It considers the IMF toolkit for public debt statistics, the peculiarities of its practical use and inherent methodological issues influencing the quantitative assessments. Estimates of the total liabilities and liquid assets for the components of the Russian public sector are given, which show, inter alia, the increase of the total liabilities of the largest state-owned enterprises (as a share of GDP) since 2016, first of all, due to the growing share of stateowned banks in the banking sector. The importance of regular monitoring and review of the public sector liabilities and assets is substantiated.

Time is Money: Could Deferred Graduate Retirement Finance Higher Education?

Higher education is never free - the question is: who should pay for it? Current policy debates in Europe are increasingly focusing on raising the share of private funding. To date, policy discussions have centred on a relatively small number of alternatives, namely full public funding, tuition fees, either up-front or delayed and income-contingent, or a surtax on graduate incomes. Here, I present an alternative that, to my knowledge, has not been suggested previously, but sidesteps some important objections against other forms of private contributions. The basic idea explored here is to increase the statutory retirement age for higher education graduates relative to non-graduates. In principle, the resulting decrease in future public pension liabilities can be converted into increased funds for present spending on higher education. In this first discussion of the above proposal I consider important caveats, perform an order-of-magnitude estimate of financial feasibility, i.e. whether deferred graduate retirement (DGR) could potentially raise sufficient funds to replace tuition fees, and discuss advantages and disadvantages compared to more established policy options. I conclude that, at least in the European context, DGR is potentially feasible both financially and politically, has a number of desirable properties compared to the alternatives, and deserves more serious investigation.

LEGAL AND REGULATORY SUPPORT FOR BALANCE IN BUDGETARY SYSTEM OF UKRAINE

The article reveals the formal and legal guarantees of the budgetary system's balance by exploring the mechanism of normative fixing of its economic meaning.Balance in the financial system has a general social rule, which is manifested in the determination of the direct relationship between the level of accumulated income through the mechanisms of forced mobilization and the guaranteed by them the volume of consumption of budget services by a person.From a formal and legal point of view, this rules is a universal general principle of the public financial system, which, on its ontological basis, has objective regularities in the movement of the value, through the establishment of such a system of interconnection between the components of economic relations — the revenue and expenditure parts — to allow the maximum tasks before the manager of the respective public fund at the expense of the financial resources involved. At the same time, the substantive and procedural expression of its normative action implies the enshrining in the legislative acts of a number of rules that limit governmental possibilities to uncontrolled debt.Economic categories of components of budgets, with the difference of their cash nature and essential impact on macroeconomic indicators, allow allocating absolutely justifiably a separate legal regime for individual non-repayable receipts (revenues) and appropriate use of funds for the implementation of programs and budgetary activities (expenditures) financing operations as a technical element of ensuring the necessary cash balance of the financial system under the conditions of the law of value movement.The structure of normative definition and interconnection of phenomena and institutions proposed to be balanced in the Ukrainian legislation is in accordance with the basic requirements of ensuring the operation of this principle, with a high degree of objectivity capable of reflecting cash results of economic processes in the country, and in the wording of the latest regulatory changes takes into account the requirements ensuring the financial security of the state through the establishment of «fuses» of sustainable regulatory control of the deficit level at the level of the generally accepted 3% predicted nominal GDP.At the same time, the formulation of this rules in the Constitution of Ukraine should be not just a «need», but as one of the mandatory normative criteria for assessing the quality of the state budget policy for its professionalism. To achieve this, the Constitution of Ukraine should set out empirical economic indicators, indicators of such a balance — a reasonable proportional amount of expenditures for the implementation of certain socio-economic rights to the GDP, fixing the marginal volume of the deficit, including taking into account recommendations the relationship between the deficit, public debt, the structure of public liabilities and the volume of GDP. In fact, these provisions will determine the constitutional limits of financial activity, provided compliance with which will ensure the financial security of the state.

Projecting the effect of climate change on residential property damages caused by extreme weather events

New Zealand's public insurer for natural hazards, the Earthquake Commission (EQC), provides residential insurance for some weather-related damage. Climate change and the expected increase in intensity and frequency of extreme weather-related events are likely to translate into higher damages and thus an additional financial liability for the EQC. We project future insured damages from extreme precipitation events associated with future projected climatic change. We first estimate the empirical relationship between extreme precipitation events and the EQC's weather-related insurance claims based on a complete dataset of all claims from 2000 to 2017. We then use this estimated relationship, together with climate projections based on future greenhouse gases concentration scenarios from six different dynamically downscaled Regional Climate Models, to predict the impact of future extreme precipitation events on EQC liabilities for different time horizons up to the year 2100. Our results show predicted adverse impacts that vary over time and space. The percent change between projected and past damages—the climate change signal—ranges between an increase of 7%–8% in liabilities for the period 2020 to 2040, and between 9% and 25% higher for the period 2080 to 2100. We also provide detail caveats as towhy these quantities might be mis-estimated. The projected increase in the public insurer's liabilities could also be used to inform private insurers, regulators, and policymakers who are assessing the future performance of both the public and private insurers that cover weatherrelated

Public Sector Balance Sheet Database

This paper provides an overview of the Public Sector Balance Sheet (PSBS) Database, a dataset developed in the context of the October 2018 Fiscal Monitor. The dataset provides a comprehensive picture of public wealth for 38 countries, and a narrower picture for further 37 countries and territories. Comprehensive PSBSs bring together all the accumulated assets and liabilities that governments control, including public corporations, natural resources, and pension liabilities. They therefore account for the entirety of what the state owns and owes, offering a broader fiscal picture beyond debt and deficits. This is particularly relevant in the current context of record and still rising debts and heightened risks to the balance sheet of the public sector. PSBSs bring about greater transparency and allow closer scrutiny of government’s financial position. They also allow better balance sheet management, thereby potentially increasing return on assets, reducing risks and the costs of borrowing, and improving fiscal policymaking. The paper also elaborates on the conceptual framework and methodology used in compiling the data, and provides some practical guidelines on the compilation, validation, and dissemination of such data.

Public Liquidity Demand and Central Bank Independence

This paper studies how a crisis that induces a large negative fiscal shock and a strong demand for safe stores of value affects the independence of a central bank vis-a-vis a fiscal authority that seeks to inflate away public liabilities. We find that the central bank can maintain price stability only if there is a large demand for its liabilities, so that it can control the net increase in government debt held by the private sector. We show that fiscal requirements are necessary even with low interest rates and massive reserve issuance is not necessarily a sign of fiscal dominance.

LIABILITY OF SPOUSES REMAINING IN THE SYSTEM OF JOINT PROPERTY FOR THE OBLIGATIONS OF ONE OF THEM AND ANTI-ENFORCEMENT ACTIONS AS A MEANS OF SUBSTANTIVE DEFENCE OF THE DEBTOR’S SPOUSE

The study concerns the scope of liability with the joint property for the obligations of one of the spouses and the issue of the defence of the debtor’s spouse by way of anti-enforcement actions. First, the matter of the property liability of the spouses for the obligations incurred by one of them when they remain in the matrimonial regime is discussed. Next, the issue of the joint property liability for the obligations due to the public law liabilities has been outlined. Further on, anti-enforcement actions as an expression of the substantive defence of the debtor’s spouse have been discussed. Finally, it was pointed out that the debtor’s spouse had an opportunity to defend himself/herself in the event of the execution from the joint bank account of the debtor and his spouse.

Public Sector Balance Sheet Database: Overview and Guide for Compilers and Users

This paper provides an overview of the Public Sector Balance Sheet (PSBS) Database, a dataset developed in the context of the October 2018 Fiscal Monitor. The dataset provides a comprehensive picture of public wealth for 38 countries, and a narrower picture for further 37 countries and territories. Comprehensive PSBSs bring together all the accumulated assets and liabilities that governments control, including public corporations, natural resources, and pension liabilities. They therefore account for the entirety of what the state owns and owes, offering a broader fiscal picture beyond debt and deficits. This is particularly relevant in the current context of record and still rising debts and heightened risks to the balance sheet of the public sector. PSBSs bring about greater transparency and allow closer scrutiny of government's financial position. They also allow better balance sheet management, thereby potentially increasing return on assets, reducing risks and the costs of borrowing, and improving fiscal policymaking. The paper also elaborates on the conceptual framework and methodology used in compiling the data, and provides some practical guidelines on the compilation, validation, and dissemination of such data.