Security Expenditure Research Articles

Cybersecurity: today’s most pressing governance issue

ABSTRACTCybersecurity is today’s most pressing corporate governance issue, but one which Boards of Directors and senior management find challenging to manage. The concept of cyber hygiene can define stress tests which assess Cyber Value at Risk, helping companies manage cyber risk as other macro-level business risks. Cyber hygiene can be described as the frequency of cybersecurity related operational stoppages or disruptions and the time required to resolve these issues when they occur. Hygiene also includes cybersecurity yield, the efficiency of a company’s security expenditure in relation to the Value at Risk. Cyber Value at Risk is a financial component of a benchmarking exercise necessary to determine cyber governance quality at an enterprise level. Cybersecurity poses significant financial risks to enterprise value, justifying its classification as a governance issue and management quality indicator. Including cybersecurity in the environment, social and governance framework prioritises the risk on board, senior management and investor agendas. Key regulatory oversight bodies increasingly require companies to manage cyber risk in a manner consistent with other macro-level business risks. Reporting on cybersecurity risk in financial terms enables the board and full executive management team to manage cyber like any strategic business risk.

The collapse of Brazilian Social Security: Macroeconomic impacts of the increase of the minimum age of PEC nº 287/2016 reform

This paper presents a simulation of the economic impacts of the increase of the minimum age contained in the Proposal for Constitutional Amendment (PEC) nº 287/2016. For that, an overlapping generations (OLG) model with 57 generations was built, including the transition rule. The results suggest that not increasing the minimum age for retirement is a very bad choice for society. The fiscal situation becomes unsustainable, and the expansion of social security expenditures, in combination with the reduction of the labor supply, leads the country to a scenario of a sharp fall in consumption and output per capita. The simulation with the new minimum retirement age of PEC nº 287/2016 indicates that, although it is not the definitive solution to the Brazilian pension issue. The results of the model indicate that raising the minimum age avoids a very bad scenario, but does not seem to be even able to maintain the current level of output per capita. As a policy suggestion, although PEC nº 287/2016 has not even been voted, the recommendation is that it represents a minimum level for the next pension reform.

Impact Of Social Security Expenditures On Income Distribution: Case Of Turkey

Income inequality is a significant hindrance to the growth and expansion of social welfare. Modern societies use many tools to overcome this hindrance. Social security system is one of the most known tools. The fact that social security spending improves the income distribution differently in each country, originating from the diversity of social security methods. In this study, the influence of social security expenditure on income distribution in Turkey is examined by Johansen and Juselius (JJ) Cointegration test for the period 1975-2010. The findings of the unit root tests show that all the variables are stationary at first difference and the findings of the cointegration test display that variables have a long run relationship. In addition, it is found that social security expenditure has a negative effect on income distribution in Turkey in the studied period, while economic growth has a positive effect on it.

Managing shocks in Singapore's ageing and retirement arrangements

ABSTRACT Asia is rapidly ageing and there is a need for governments to adjust social security expenditures accordingly to facilitate better management of socioeconomic shocks by the individual/household and society as a whole. This article examines the ageing and retirement arrangements in Singapore and argues that they provide a very limited ability for the individual/household to mitigate the effects of an adverse socioeconomic shock. A major contributor to this is the limited social risk pooling resulting from a continued focus on mandatory savings to a defined-contribution scheme for ageing and retirement-financing needs, age and gender biases in existing policy designs, and low real rates of return to mandatory savings balances. More fundamental reforms are needed if Singapore is to be able to better manage the impact of adverse socioeconomic shocks. This includes introducing a budget-financed universal social pension, and a realignment of the mandated returns to the contributions and balances under existing retirement financing arrangements. Otherwise, there is potential for socially-destabilizing and -detrimental outcomes to emerge in the medium- to longer-term.

Allocating Security Expenditures under Knightian Uncertainty: An Info-Gap Approach

ABSTRACT We apply the information gap approach to resource allocation under Knightian (non-probabilistic) uncertainty in order to study how best to allocate public resources between competing defence measures. We demonstrate that when determining the level and composition of defence spending in an environment of extreme uncertainty vis-a-vis the likelihood of armed conflict and its outcomes, robust-satisficing-expected utility will usually be preferable to expected utility maximisation. Moreover, our analysis suggests that in environments with unreliable information about threats to national security and their consequences, a desire for robustness to model misspecification in the decision-making process will imply greater expenditure on certain types of defence measures at the expense of others. Our results also provide a positivist explanation of how governments seem to allocate security expenditures in practice.

An Economic Analysis of Intra-governmental Account Transfers: Social Security and Public Infrastructure in Japan

In the context of limited local government resources, it is often targeted to secure financial resources for social security expenditures for the aging society and upkeep expenditures against the aging of public infrastructure facilities. This paper examines whether transfers from general accounts to special accounts and public enterprise accounts have a significant impact on the financial burden of local governments, using panel data from Japanese local governments. We find that transfer to special accounts and public enterprise can inflate the net liabilities.

Enterprise security economics: A self‐defense versus cyber‐insurance dilemma

AbstractWe propose a model that optimizes enterprise investments in cybersecurity using expected utility theory. The model allows computing (a) investment in self‐defense to reduce the risk of security breaches, (b) investment in cyber insurance to transfer the residual risk to insurance companies, and (c) investment in forensic readiness to make the insured firms capable of generating provable insurance claims about security breaches. A three‐phase–based model of vulnerability rate evolution over time is proposed and used to estimate the different planned security expenditures throughout the investment horizon. At the starting time of investment, a decision maker invests to cover the existing risk of breach and periodically spends to cover the additional risk observed due to the release of new vulnerabilities. In this work, the intermediate tranches are determined while considering three different attitudes of decision makers, namely, optimistic, pessimistic, and realistic. An analysis is conducted to assess the performance of the proposed models.

Social Security and Sustainable Economic Growth: Based on the Perspective of Human Capital

China’s social security expenditure has rapidly grown during the past decade, and concerns about the impact of social security on productivity and sustained economic growth have attracted attention. Based on Chinese provincial panel data over the period 2007–2016, a threshold model analysis found that the impact of social security on productivity has a “double threshold” on human capital. Using dynamic panel data models and system General Moment Method estimators also found the existence of this threshold effect: When the human capital level is low or high, social security is favorable for sustained economic growth. However, if the human capital level is at the intermediate level, the function of social security is weak. The main conclusions were still valid after we examined the robustness of our results with several methods.

Social security expenses with patients with back pain by the National Institute of Social Security of Brazil from 2008 to 2014

Objective: To analyze all social security expenditures paid by Brazilian Institute of Social Security (INSS) of lower back pain, from 2008 to 2014. Methods: Consultation to Social Security database in order to obtain information about the main benefits offered individuals by the INSS, in the period between 2008 and 2014. Based on the Social Security database and the ICDs M51 and M54, the INSS expenditures were assessed for low-income retirement, sickness and to accidental retirement, between men and women from urban and rural areas from 2008 to 2014. Results: In this period, the most prevalent benefit was Disease Aid, with an average annual cost of R$ 88.458.511,10. The total cost of benefit was: Accidental Sickness Insurance-R$ 116.076.692,00;Accidental Retirement-R$ 6.740.052,84; Illness Assistance-R$ 373.547.294,00; Retirement Due to Disability-R$ 75.883.844,00. Among all the above mentioned beneficiaries, there was a predominance of males and individuals living in the urban area. Conclusions: Lower back pain leads to suffering for workers, costs to companies, as well as burdening the public coffers regarding the social security system and health care.

Accounting, analysis and audit in management of economic security expenditures

Due to increasing globalization and competition, businesses have been forced to spend more time and money on taking measures aimed at economic security. Accounting, economic analysis, and audit play a significant role in the management of economic security expenditures since they make the management system more effective, reliable and sound. Therefore, this issue is currently of particular interest and needs to be interpreted. The purpose of the article is to examine the current state, challenges and future directions of improving accounting, economic analysis and audit in management of economic security expenditures. The methodology used for studying the issues relevant to economic security includes general and specific research methods enabling the description of economic processes, economic phenomena and facts, namely, those involving prime records, the registers of synthetic and analytical accounting, reports on economic security expenditures, carrying out analytical procedures, and auditing. The authors use monographic and graphic methods, methods of grouping and comparison of indicators, analysis of the dynamics and structure of expenditures, factor analysis, modelling and budgeting expenses on economic safety of enterprises, planning measures for the significant improvement of accounting, economic analysis and audit in enterprises. The authors claim that the term ‘accounting’ will exist until significant changes affect the objectives and contents of accounting. Although the Ukrainian word ‘бухгалтерський (book-keeping)’ is derived from the German word ‘Buch’ that means ‘book’, it is still in use today. In the era of technological development, outdated paper books (accounting information carriers) are being replaced by electronic books which have become widespread. The article offers to improve accounting policies and procedures relevant to measures aimed at economic security by separating information on synthetic account 92 “Administrative expenses” into nine sub-accounts: 921 “General corporate expenses”; 922 “Expenses on business trips and maintenance of management”; 923 “Expenses on non-current tangible assets for general economic purposes”; 924 “Remuneration for advisory, information, audit and other services”; 925 “Communication and Internet costs”; 926 “Litigation settlement costs”; 927 “Taxes, fees (obligatory payments, licenses)”; 928 “Payment for services provided by commercial banks”; 929 “General-purpose expenses”. The following analytical accounts of the second, lower order should be opened to analytical account 9291 “Expenses on the economic safety of the enterprise”: 92911 “Costs of internal security service”; 92912 “Costs of data and commercial secrets protection”; 92913 “Costs of receiving, storing and transmitting technical and economic information”; 92914 “Costs of recruiting staff specialized in economic security”. The authors believe that in order to cover expenses on maintaining economic security it is advisable to reserve sources of funds on synthetic account 47 “Provision of future costs and payments” by using sub-account 471 “Provision of other costs and payments” and analytical accounts to it: 4711 “Technical facilities for economic security”; 4712 “Use, maintenance and repair of facilities for maintaining economic security”; 4713 “Personnel support for economic security”. An audit of economic security expenditures is proposed to be carried out in relation to budgets for such expenditures, articles and elements, effectiveness and duration of economic security expenditures, etc. It is also necessary to analyze whether the dynamics and structure of costs are proportional to the budget for economic security of the enterprise. Furthermore, it is important to identify the main positive and negative factors that significantly affect such expenditures. Identifying factors like these allows experts to take certain measures that will partially or completely eliminate negative effects on economic security expenditures of the enterprise. Further research projects in accounting, economic analysis, audit, and analytical support for managing economic security expenditures of the enterprise should be based on the current national and foreign methodology and organization of accounting, economic analysis, and audit, analytical support of the operating activity of large and medium enterprises. Further studies should widely apply methods of operational and strategic planning, modelling cost-management systems, etc.

Short and long-term correlation of social security expenditure and human development: Turkish model

The aim of this study is to analyse the relationship between social security expenditures (SSE) and human development in Turkey between 1990 and 2014. The main variables of the analysis include the proportion of social security expenditures in gross domestic product (GDP) for social security expenditures and the re-calculated real Human Development Index (HDI) values, with data from the Turkish Statistical Institute (TUIK) for human development. In doing so, the auto-regressive distributed lag (ARDL) bounds test for co-integration is employed. It has been seen upon conclusion of the analysis that social security expenditures are positively affecting human development on a significant level, in both the short- and long-term.

Females, the Elderly, and also Males: Demographic Aging and Macroeconomy in Japan

The speed and magnitude of ongoing demographic aging in Japan are unprecedented. A rapid decline in the labor force and a rising fiscal burden to finance social security expenditures could hamper growth over a prolonged period. We build a dynamic general equilibrium model populated by overlapping generations of males and females who differ in employment type and labor productivity as well as life expectancy. We study how changes in the labor market over the coming decades will affect the transition path of the economy and fiscal situation of Japan. We find that a rise in the labor supply of females and the elderly of both genders in an extensive margin and in labor productivity can significantly mitigate effects of demographic aging on the macroeconomy and reduce fiscal pressures, despite a decline in wage during the transition. We also quantify effects of alternative demographic scenarios and fiscal policies. The study suggests that a combination of policies that remove obstacles hindering labor supply and that enhance a more efficient allocation of male and female workers of all age groups will be critical to keeping government deficit under control and raising income across the nation.

老龄化对我国社会保障支出的影响

老龄化对我国社会保障支出的影响

Análise de fatores influentes na relação entre constribuições e benefícios previdenciários

Este estudo procurou identificar fatores que podem corroborar com as diferenças entre as arrecadações e despesas previdenciárias (RGPS) no que tange aos municípios de Minas Gerais. Na revisão de literatura, discutiu-se as clientelas previdenciárias, a influência dos cenários trabalhistas e demográficos e socioeconômicos na previdência social, o debate sobre o déficit previdenciário e a conexão entre a previdência social, as finanças públicas e o Estado de bem-estar social. Quanto a metodologia, foi utilizada a Análise Exploratória de Dados, Análise Fatorial, e o Teste de Independência de Qui-Quadrado, visando associar entre os fatores encontrados e o Indicador de Resultado Previdenciário Primário (IRPP) criado. Os resultados demonstraram a conexão do IRPP às condições socioeconômicas municipais, confirmando a hipótese testada. Ademais, verificou-se relação entre aspectos de localidade populacional, demográficos, trabalhistas e de desenvolvimento humano com o mesmo indicador. Concluiu-se os desequilíbrios financeiros no RGPS podem ser retratados por cenários socioeconômicos negativos

Who Should Pay for Interdependent Risk? Policy Implications for Cyber-Physical Security Interdependence in Aviation

This study addresses various issues in the study of interdependent cyber security, and sheds light on the economic and policy implications of increasing security interdependence. We investigate the impact of a policy arrangement affecting security interdependence on agents' regulated and unregulated actions, and the corresponding costs to society. Focusing on security expenditure issues in the airport network, we first develop a game theory based analytical framework, and derive explicit Nash equilibrium and socially optimal solutions. We then conduct numerical experiments that reflect the real-world context (data from Airport Council International), to assess the impact of a change in interdependence on airports' security expenditures and the overall expected costs to society and the fairness of security financing. Our study provide insights on the economic and policy implications for US, Europe and Asia.

Activation against absenteeism – Evidence from a sickness insurance reform in Norway

I evaluate a program aimed at strictly enforcing a requirement that people on long-term sick leave be partly back at work unless explicitly defined as an exception. Employing the synthetic control method, I find that the reform reduced work-hours lost due to sickness absenteeism by 12% in the reform region compared to a comparison unit created by a weighted average of similar regions. The effect is driven by both increased part-time presence of temporary disabled workers and accelerated recovery. Musculoskeletal disorders was the diagnosis group declining the most. The findings imply large savings in social security expenditures.

Determinants of Public Indebtedness in European Union Countries

Abstract The paper strives to determine the impact of fiscal variables on factors determining the dynamics of public debt in European Union countries. Based on the literature, the dynamics of public debt are determined by changes of three elements: the primary balance, interest-rate-growth-differential and the change of government assets. Therefore, it seems reasonable to estimate the dynamics of these three values to find the variables crucial for limiting the growth of public debt. Three groups of dynamic panel regressions were estimated based on the one-step Generalized Method of Moments. The data was collected for the 1995-2015 period for 27 EU countries. Dependent variables included: primary balance, interest-rate-growth-differential and change of government assets. Independent variables consisted of: interest payable to GDP ratio, unemployment rate, squared unemployment rate, FDI stock to GDP, net FDI inflow to GDP, general government expenditures to GDP, share of social security expenditures and openness of the economy measured by the ratio of export and import to GDP. On the basis of statistical data, three components of debt changes were distinguished, and estimations of the dynamic panel regressions were applied to find the impact of independent variables. According to the basic models, the primary balance is lower for: countries with higher unemployment, greater FDI stock and higher general government expenditures. The interest-rate-growth-differential is lower in the case of: high subsidies and for a more open economy. However, unemployment and FDI remain the most important determinants of this variable. The change of government’s assets ratio decreases as FDI net inflows or the share of expenditures to GDP increase as well as in the case of very high unemployment.

Impact of security expenditures in military alliances on violence from non-state actors: Evidence from India

In this paper, we investigate the impact of security expenditures from military alliances involving third-party intervention on violent incidents from non-state actors. Our main learning is a rather surprising fact that at a lower level of security expenditure in the violence affected area, an increase in security expenditures leads to an increase in violent incidents (rather than a decrease); and only at higher level of security expenditure in the area, an increase in security expenditure leads to a decline in violent incidents. For the analysis, we use a novel dataset on naxalite violence obtained directly from the police head-quarters of the three most affected states in India. The data consists of 64 districts spanning over years 2001 till 2013 and includes information on the annual number of violent incidents and the size of the security forces allocated specifically to curb the naxalite violence. We use negative binomial regression model with the number of violent incidents as the dependent variable and lagged size of security forces as the independent variable, while controlling for other relevant variables. Further, to address issues of potential reverse causality, we use a propensity score matching technique to infer the causal nature of such an association.We also argue that when the union government intervenes as a third party to support the state governments to fight the naxalites, the latter may be under-funding by free riding. However, despite such underfunding, if the overall contribution is positive and continued, eventually the concentration of security forces in an area will overwhelm the naxalites and reduce the incidents.Lastly, we highlight that though the mainstream literature on civil wars has used per capita income as a proxy for security expenditures, it becomes inappropriate when a more direct measure of security expenditures is used.

Public social security burden of musculoskeletal diseases in Brasil-Descriptive study.

To present data on the social security burden of diseases of the musculoskeletal system and connective tissue (DSOTC) in Brasil in 2014, and evolution of these social security expenditures between 2009 and 2014. Compilation and analysis of data on the granting of disability pensions and sickness benefits in the year 2014, available on the official website of Social Security, classified according to ICD 10. It was evaluated the evolution between 2009 and 2014, using the F test to compare the curves with the growth of the active age population (PIA). Among the 22 disease groups classified according to ICD-10, the DSOTC group led benefits grants in 2014, with 19% of the sickness benefits and 13.5% of the disability pensions. The main causes of sickness benefit and disability retirement were, respectively: dorsopathies (43.3% and 41.2%), soft tissue diseases (27.3% and 19.7%), osteoarthritis (7.6% % And 27.8%) and chronic inflammatory arthropathies (2.8% and 7.9%). In the evolution of the number of sickness benefits granted between 2009 and 2014, both INSS and DSOTC totals showed an increasing tendency (35.9 and 35.3%, respectively, with p = 0.000 for both). As for disability retirement, there was a 5.9% increase in the INSS total (p = 0.039), while for the DSOTC there was a decrease of 7.6% (p = 0.005). These data point to a progressive increase in the granting of sickness pensions and disability benefits in the country, superior to the growth of the PIA, as well as a high participation of DSOTC in these benefits.

How do social security expenditures vary by state? The surprising impact of unemployment

AbstractWe examine state-level variation in the flow of benefits under the largest Social Security programme – the Old-Age (OA) programme. OA pensions remain a robust and growing component of the American social safety net. Although OA pensions are entirely administered by the federal government, state-level demographic features can imply different aggregate levels of programme expenditures across states. We describe high levels of variation in the resources flowing into states from the OA programme and we find relationships between state features that might seem only remotely related to income support for the elderly: current unemployment rates, previous income levels, poverty rates and minority populations. We find a particularly strong link between current unemployment rates, OA coverage and OA average benefits. The number of recipients and the level of average OA payments increase when unemployment increases. This is a poorly understood but important feature of the OA programme.