Funding Rules Research Articles

Financing public transport: a spatial model based on city size

Purpose The purpose of this paper is to investigate the relationships between public transport services and the financial needs. Cities require to be equipped with public transport networks as they are primarily responsible for creation of wealth for countries and to ensure sustainability of urbanization. Once decisions have been taken to design, build and operate such networks, it is equally important to set rules for urban transport financing. Depending on the city size and other factors, authorities allocate resources. Nonetheless, is there a relationship between the size of the city and its public transport financial needs? This paper develops a model to explain such relationships. Design/methodology/approach The study develops a spatial model, while providing intuition through the use of graphs, to solve the question of the amount of resources allocated for financing the transport services. Findings It is verified that those financial needs are more than proportional to the size of the city; when a city grows in its number of boroughs, economic funds needed to support public transport have to increase in a greater proportion in comparison to the growth of boroughs growth. The model states a formula valid for explaining the financial needs. Originality/value The model is interesting as it explains why large metropolitan areas need special financial aid from authorities. Real life shows that big cities like Paris, Berlin or Madrid need extraordinary funds for this purpose, and in most of the cases, specific national laws are required for financing public transport networks in these large metropolitan areas.

Determinants of sub-central European government debt

The aim of this paper is to analyze the determinants of sub-central government debt in Europe (Italy, France, Austria, Germany, Belgium and Spain) through estimation for each State based on corresponding panel data from 1996 to 2010. Furthermore, we estimate the debt model using a joint sample, consolidating conclusions on the most influential variables in terms of public debt. A comparative analysis of institutional frameworks in Europe shows that relationships between central and sub-central tax authorities have common traits, although the extent of change in each country remains unknown. In sum, this study shows that sub-sovereign government budgets are counter-cyclical, that economies of scale are present, which the golden rule of public finance is followed, that population growth and lower per capita financing lead to higher debt levels, and that regions characterized by higher debt/GDP ratios tend to have lower future deficits.

Stakeholder Conflicts and Cash Flow Shocks: Evidence from Changes in ERISA Pension Funding Rules

ABSTRACTIn 2012, Congress passed Moving Ahead for Progress in the 21st Century (MAP-21), which changed the ERISA pension funding rules such that mandatory pension contributions decreased. Advocates for the bill argued that reducing mandatory contributions would increase firms' investment. In contrast, I do not find an average increase in investment among the firms benefiting from MAP-21. Rather, I find that firms either hold pension funding relief on their balance sheets as liquid assets or pay out pension funding relief to shareholders. To the extent that managers increase investment in response to MAP-21, it is concentrated in firms with weak governance or ineffective internal controls.

Not Just Any Child Care Center? Social and Ethnic Disparities in the Use of Early Education Institutions With a Beneficial Learning Environment

ABSTRACT This study investigates social and ethnic differences in the use of early childhood education and care (ECEC) centers with different learning environments in an ECEC system with universal state-subsidized provision and low fees. Based on the German National Educational Panel Study—Kindergarten Cohort from 2011, we matched data on 587 groups in 253 ECEC centers with information on about 1,700 children and their parents and applied stepwise multivariate regression models. Research Findings: The results showed that social and ethnic differences tended to be small and were mostly not significant in terms of structural quality, activities, and materials in ECEC centers. In contrast, large disparities emerged regarding the use of ECEC centers with different compositions of children: Children of low educated parents and those with a non-German family language attended institutions with higher proportions of children from families with low educated parents and from families with a non-German family language, respectively. Practice or Policy: To counteract and compensate for the large disparities in the social and ethnic composition of children in ECEC centers, state funding rules and structural quality standards should take the composition more strongly into account.

The Rules of an Occupational Retirement Fund and the Problem of Defaulting Employers: A Reconsideration of Orion Money Purchase Pension Fund (SA) v Pension Funds Adjudicator

This paper reflects on the ongoing challenges presented by certain employers who, whilst deducting occupational retirement fund contributions from their employees' salaries, fail to pay over those contributions to the relevant occupational retirement funds. These employers also often fail to register themselves or their employees as participating members of occupational retirement funds when they are supposed to. Such failures to register with the relevant occupational retirement funds and to pay over fund contributions have disastrous effects on the employees who are at the receiving end of these unlawful practices. This is the case because employees lose the value and use of their salaries through the deductions, and also the benefits of their occupational retirement funds.
 Although the Pension Funds Act 24 of 1956 is sufficiently responsive and provides adequate mechanisms to guide against this scourge, it is this paper's argument that occupational retirement funds themselves have not done their bit in enforcing the Pension Funds Act. The failure on the part of the funds to enforce the Pension Funds Act by ensuring that fund contributions are collected from participating employers has resulted in, and continues to result in, untold losses on the part of the employees. Properly considered, the paper submits that the failure by occupational retirement funds to enforce the Pension Funds Act has the potential of unjustifiably limiting several of the employee members' constitutional rights.
 It is not good enough, so argues the paper, for occupational retirement funds to have rules that prohibit them from paying retirement fund benefits where no contributions have been received. It is also not good enough for courts and the office of the PFA to blindly enforce the rules of occupational retirement funds without consistently subjecting them to the Pension Funds Act and the Constitution for validity and legality. It is on this basis that the case of Orion Money Purchase Pension Fund (SA) v Pension Funds Adjudicator is challenged. The case is authority for the principle that the only available remedy to an employee who has been cheated out of retirement fund benefits owing to the employer's failure to make fund contributions is one that compels the fund to calculate those outstanding contributions and demand that total sum from the employer. For various reasons this does not address the problem of defaulting employers, which can be addressed only by properly enforcing the Pension Funds Act and also consistently subjecting the rules to the Act in cases of disputes.
 

Concern Regarding the "Debt" created by Rule 14.10.9 of the Government Employees' Pension Fund Rules

This paper highlights the prejudicial effect of the rule within the rules of the Government Employees Pension Fund (GEPF), which allows this fund to create a "divorce debt" for its member when the court has ordered that part of such a member's pension interest be paid over to his or her spouse. I argue that this debt is in fact a loan which is provided to the member, which he or she would be expected to pay when he or she exits the fund, with interest. This is despite the fact that the rules of the GEPF do not permit the granting of loans to its members. I argue that the creation of such a loan has the effect of diminishing the GEPF's member’s benefits, and thus threaten his or her social security, and can lead to the member becoming unable to provide for himself or herself when he or she reaches retirement age. 

Do Institutions and Rules Influence Electoral Accessibility and Competitiveness? Considering the 2014 Toronto Ward Elections

Electoral and campaign finance reforms are believed to improve the competitiveness of elections and the accessibility of the electoral process; however, the interaction between electoral institutions and competitiveness and accessibility in nonpartisan municipal elections remains understudied. This article examines the City of Toronto, which exemplifies many of the reforms proposed in the American context, including a strict campaign finance regime and low barriers to candidate entry. Analysis of campaign finance disclosure data and candidate characteristics for Toronto’s 2014 ward elections reveals that electoral and campaign finance rules increase electoral accessibility while doing little to limit incumbency advantage. We argue that crowded nonpartisan races are low-information environments in which candidates, donors, and voters cannot assess challenger quality, which reinforces incumbent name recognition and access to campaign resources. The Toronto case highlights the limits of institutional and regulatory change as a means of increasing local electoral competitiveness and accessibility.

Nigeria: Contributions to Investorss Protection Fund and the Fraudulent Preference Risk

Investors’ Protection Fund is a quasi-insurance scheme which securities exchanges and capital trade points in Nigeria are required to set up pursuant to section 197 of the Investments and Securities Act, 2007. The primary aim of investors protection funds is to compensate investors who suffer financial losses resulting from: (i) insolvency or negligence of any dealing member firm, and (ii) embezzlement of securities, money or property in the custody of any dealing member firm or any of its directors, officers, employees or representatives in relation to securities, money or property in the course of its business as a capital market operator: sections 198, 204(a) and 212(b) of the Investments and Securities Act, 2007. In 2012, the Nigerian Stock Exchange (NSE) created its investors protection fund with a seed capital of about NGN625 million. There are eight sources of funds for an IPF, one of which is monies by dealing member firms: sections 202(a) and 209 of the Investments and Securities Act, 2007. Accordingly, Rule 3.02 of NSE’s Investors Protection Fund Rules 2013 (IPFR) requires dealing members to contribute: (i) NGN1 million prior to the acquisition of a dealing membership license, (ii) NGN1 million prior to a dealing member firm’s acquisition and (iii) an annual premium. Dealing members may also be levied where there is deficiency of funds in the Investors Protection Fund.

In Good Times and in Bad: Defined Benefit Pensions and Corporate Financial Policy

U.S. sponsors of defined-benefit pension plans make smaller contributions not only as a function of the funding level and past performance of the pension plan, but also if they have less cash, are less profitable and are financially distressed. As a result, plans have larger funding deficits if the sponsor is closer to bankruptcy and the plan has low investment returns. In fact, U.S. pension plans are still significantly underfunded in 2014 despite recent regulation to improve funding levels. Similarly, plan sponsors make more aggressive pension plan assumptions if they are financially distressed. While plan sponsors generally take less risk with their pension assets if they have high business or financial risk, there is some evidence of risk shifting during the financial crisis. As a result, funding rules, pension plan assumptions and investment policies are areas to consider for pension policy to protect plan beneficiaries.

REGULATORY ASPECTS OF IMPLEMENTATION OF JOINT EDUCATION PROGRAMS

The purpose of a review article is the systematization and analysis of the existing legal framework of joint educational programs at both local and state level, identifying the stages of their development and implementation that require additional regulation. Despite the experience of the Russian universities, the key risks of development and implementation of joint educational programs are still the following - incomplete regulatory base and significant differences in its interpretation. The article clarifies the nature and classification of joint educational programs, as one of the types of network educational programs. Authors propose key features of joint educational programs: poly-subject nature, unified curriculum, synchronicity, complementarity, legal basis and parity. The article presents the results of the analysis of the regulatory framework for the development and implementation of joint educational programs in Russian universities on the basis of a comparison with the European experience, in which they are an instrument of formation and development of the European higher education area. Systematization of the stages of development and implementation of joint educational programs and normative documents of the local and state levels helped to identify that the following processes are still not regulated: the formation of the consortium of joint educational programs partners, program management and quality assurance. Taking into account the peculiarities of the Russian system of higher education additional regulation is required concerning admission of students to joint educational programs, funding rules and state accreditation requirements and procedures. However, universities are granted considerable academic freedom in the development and implementation of joint educational programs, ensuring their quality conforms to the European approach to the regulation of higher education and it requires a certain maturity of local normative systems of the universities. The findings can be used by higher educational institutions in the field of improvement of local normative systems for joint educational programs. At the state level, improvement of the legal regulation of such programs has important conceptual value, as they are an example of the transition from the concept of «value chain» to «value network» when a partnership of competitors in the market is no longer a resource but a mechanism for providing services and manufacturing products. Therefore, the development of regulations of joint educational programs is a necessary step for the development of new types of educational products and technology in the higher education of Russia.

Features of cash flow compared to profit

Taking into account modern business circumstances, it is easy to conclude that money represents the most significant and the most deficient of goods. One of the most important conditions for such a situation, among other things, is the irresponsibility of numerous business organization leaders. Due to a high degree of competitiveness and the globalization of the modern market, each business segment must be thoroughly planned. The problem of liquidity is one of the most modern issues that modern economic organizations encounter. The starting point for solving a large number of organizational-business problems are the financial statements of the organization, in the forms of a balance sheet, an income statement and a cash flow statement. The topic of this paper is the presenting of a real economic situation in which a business organization realizes, at the same time, profit but also negative cash flows. The necessary and essential roots to address this disparity are the proper planning of operations. It is necessary to apply some of the basic balance rules of financing that are reflected in the matching of fund maturity and funding sources. It is necessary to finance short-term funds exclusively from short-term sources. Otherwise, the liquidity of the organization can be seriously disrupted.

State Responses to U.S. Supreme Court Campaign Finance Decisions

Recent federal court decisions have deregulated state campaign finance systems to a significant degree. These decisions are not only rooted in First Amendment jurisprudence but also raise issues of federalism. Although most studies of federal–state conflict focus on disputes between state officials and elected federal policy makers, courts are also policy-making institutions, and in the absence of policy making by other federal branches, courts have become the critical federal policy maker in this area. In response to U.S. Supreme Court rulings that deregulate campaign finance rules and are out of step with the policy preferences of many state electorates and officials, states are attempting to resist these rulings, but using different approaches than are used by states in disputes with the Congress or President. We discuss these rulings and state responses to them. We also describe the implications of these dynamics for federalism.

Doctors' perspectives on PSA testing illuminate established differences in prostate cancer screening rates between Australia and the UK: a qualitative study

ObjectivesTo examine how general practitioners (GPs) in the UK and GPs in Australia explain their prostate-specific antigen (PSA) testing practices and to illuminate how these explanations are similar and how...

Nonprofits stressing over compliance with new finance rules, regulations

Nonprofit executives are increasingly concerned about compliance with the various finance‐related rules and regulations that govern the sector, according to new research by nonprofit software firm Abila. The report, coming on the heels of new federal rules on overtime pay, deferred compensation and new accounting standards for charities, highlight the headaches such changes can be for the nation's nonprofits.

The role of the Brazilian Congress in defining public social policies

ABSTRACTThe analysis of the role of Congress in defining public policy matters to the debate on the characterisation of legislatures in a spectrum that ranges from the ‘transformative’ to the ‘arena’ type (according to the typology of Polsby). This paper, related to the Brazilian case, considers definitions relevant to the areas of education and health. On education, this study presents an analysis of the content of the legislative proposals of parliamentarians and two case studies, which discuss policy definitions of funding and quality assessment. On health, this article presents an analysis of related legislative proposals and especially those that resulted in funding rules. These studies suggest that Congress in Brazil has an important part to play in defining public policies, acting either as a transforming agent or as an arena for debates. The Brazilian Congress seems to have been, at the same time, active, reactive, collaborative and innovative. This finding leads to the conclusion that the Brazilian Legislature must be placed at an intermediate level between the extreme types of Polsby’s categories; this position is compatible with the ‘coalitional presidentialism’.

ІНВЕСТУВАННЯ У РИНКОВІ ЦІННІ ПАПЕРИ

В статті розглянуто сутність інвестицій в цінні папери через дослідження їх інвестиційної привабливості, цілей інвестування та етапів їх здійснення. Зазначено, що з розвитком фондового ринку у економічних суб’єктів збільшуються можливості інвестування коштів в цінні папери, що пов’язано з усвідомленням інвесторами інвестиційної привабливості цінних паперів. Обгрунтовано, що чим більш ефективним буде управління процесом інвестування, тим вищим буде ефект від здійснених вкладень, і, відповідно, швидше відбудуться позитивні зрушення в розвитку економіки.
 Інвестиційна привабливість цінних паперів досліджена через комбінацію їх інвестиційних якостей, які в сучасній економічній літературі також прийнято називати інвестиційними властивостями, характеристиками або споживчими властивостями. Вони визначаються інвесторами залежно від цілей інвестування. Задля аналізу особливостей інвестування було розглянуто види та причини інвестування в цінні папери. Зазвичай інвестор самостійно обирає будь–який з доступних шляхів інвестування. При цьому, важливо пам’ятати основне правило фінансів: чим вище доходність, тим вище ступінь ризику. Інвестування в різні цінні папери (акції, облігації і т.д.) різних компаній дає можливість встановити прийнятний ступінь ризику для інвестора.
 Інституційні інвестори, залучаючи кошти індивідуальних інвесторів, які потім вкладають у цінні папери інших емітентів, істотно впливають на функціонування ринку цінних паперів та його активність.
 Здатність інституційних інвесторів до ефективного перерозподілу тимчасово вільних ресурсів досягається шляхом оцінки можливих ризиків і мінімізації їхніх негативних наслідків.

The Information Content of Corporate Pension Funding Status in Japan

AbstractThis paper tests if a firm's pension funding ratio (pension assets/PBO) reveals the management's private information about the firm's operation when the firm can exercise discretion in pension funding. The lax enforcement of pension funding rules and the prevalence of management forecasts make Japanese firms an ideal testing ground. We show that, among firms with large business uncertainty, large accruals, or high effective tax rates, the pension funding ratio predicts the firm's management forecast errors significantly beyond conventional control variable and the effects of pension accounting management. However, the stock market does not appear to incorporate this information immediately.

The institutional design of funding rules at international organizations: Explaining the transformation in financing the United Nations

What explains the design and development of funding rules at international organizations? I investigate this question in the context of the United Nations system, which has undergone a dramatic shi...

Public investment, the rate of return, and optimal fiscal policy in a stochastically growing economy

This study examines the optimal fiscal policy in a stochastic endogenous growth model with private and public capital. The government is willing to actualize a socially optimal equilibrium using a lump-sum tax and government debt linked to public investments, subject to the budget constraint under the golden rule of public finance. A socially optimal fiscal policy states that a deterministic rate of return on government bonds sets the marginal product of public capital. Moreover, public investments optimally adjust the ratio of private capital to public capital to equate the rates of return on such capital. The presence of stochastic disturbances results in a disparity between the optimal marginal products of the two types of capital, as reported in previous empirical studies. This disparity significantly affects the socially optimal growth rate in response to investment risk.

The political economy of (De)centralization with complementary public goods

This paper provides a political economy analysis of (de)centralization when local public goods—with spillovers effects—can be substitutes or complements. Depending on the degree of complementarity between local public goods, median voters strategically delegate policy to either ‘conservative’ or to ‘liberal’ representatives under decentralized decision-making. In the first case, it accentuates the free-rider problem in public good provision, while it mitigates it in the second case. Under centralized decision-making, the process of strategic delegation results in either too low or too much public spending, with the outcome crucially depending on the sharing of the costs of local public spending relative to the size of the spillover effects. Hence, with a common financing rule, centralization is welfare improving if and only if both public good externalities and the degree of complementarity between local public goods are both relatively large.