Share Of Government Expenditure Research Articles

Economic impact of government health expenditure: An application of the computable general equilibrium model to the Iran

BACKGROUND: Considering the increase in health expenses and the government’s role in health financing, this study investigated the economic impact of increases in the share of the health sector in the government budget while taxes remain unchanged and government spending is fixed. MATERIAL AND METHODS: The economic model used in this study was a macroeconomic Computable General Equilibrium (CGE) model. This model was calibrated using a 2011 Social Accounting Matrix (SAM) Of Iran. The CGE model was solved with non-linear programming using the General Algebraic Modeling System package, version 2.50. The effect of this simulation on the government budget deficit, the production of different sectors of the economy, and the employment rate was investigated. RESULTS: Based on our fundings the elasticity of substitution in the agricultural and industrial sectors is higher than in the health and service sector. Also, the biggest decrease in production occurred in the industry, agriculture, and service sectors, respectively. With the doubling of the share of government spending in the health sector, the employment rate of this sector has increased by 40.9%, but the highest decrease in the ignition rate is related to the service sectors (−2.7%), agriculture (−0.23%), and industry (−0.14%). CONCLUSION: Increasing the share of government spending in the health sector in comparison with other sectors of the economy, provided that government spending is maintained in general, leads to a decrease in production and economic welfare. It seems that the Iranian government should seek to increase the sources of health financing and the share of government expenditures in the health sector with other ways in order to improve the health level of the society and have a positive effect on other economic sectors.

GOVERNMENT EXPENDITURES ON HOUSEHOLD CONSUMPTION – LEVEL, CHANGES, AND THEIR RELATIONSHIP WITH SOCIO- -ECONOMIC DEVELOPMENT INDICATORS IN EUROPEAN COUNTRIES

Aim: The aim of this article is to examine changes in government expenditures on household consumption in European countries and the relationship of these expenditures with socio-economic indicators. Methods: The study is based on data analysis from 36 European countries, using the Eurostat database and various rankings such as the Happiness Index, Human Development Index, Sustainable Development Goals, and Social Progress Index. The analysis focused on the trends in government expenditures on household consumption and aimed to explore the association between these expenditures and socio-economic indicators. Results: Significant changes in the share of government expenditures on household consumption in the GDP were observed among the studied countries during the period from 2011 to 2022. Some countries increased their expenditures, while others decreased them. Cluster analysis revealed four groups of countries based on the share of government expenditures on household consumption in GDP. Conclusions: There was no direct correlation between the level of government expenditures on household consumption and socio-economic indicators among the studied countries. Instead, variations in socio-economic development were observed among different groups of countries, regardless of the level of government expenditures on household consumption.

Health Infrastructure and Economic Development Nexus in Nigeria

Nigeria like many other Sub-Saharan African countries has been plagued with lack of functional infrastructure in order to grow the economy. Recent events in Nigeria, such as the COVID-19 pandemic, which emerged in late 2019 and continues to impact Nigeria, has exposed the vulnerabilities and weaknesses in the country's health infrastructure. This study investigates the impact of health infrastructure on economic development in Nigeria. The study employed time series data. Health infrastructure was captured by government recurrent and capital expenditure on health while economic development was proxied by per capita gross national product. The Autoregressive Distributive Lag (ARDL) estimation technique was used to establish the long run relationship among the variables. It was revealed that long run relationship exists among the variables in the estimated model. The results of the Error Correction Mechanism (ECM) within the framework of the ARDL shows that health infrastructure has significant impact on economic development in Nigeria. The study concludes that health infrastructure plays key roles in influencing economic development in Nigeria, and for the optimal performance of the economy, the government must increase infrastructural spending on health care in order to reduce the rate of maternal, infant and under-five mortality in the country. The study recommends that; there is a need for the government at all levels to massively invest in the provision of health infrastructure which is a strong viable means of reducing mortality incidence and enhancing economic development in Nigeria. Nigeria’s share of government expenditure to the health sector ranges between 5-7 percent, which falls immensely below the minimum standard of 16 percent as recommended by UNESCO for a developing country, which calls for emergency intervention in the health sect

Politician’s childhood experience and government policies: Evidence from the Chinese Great Famine

We analyze the impact of a politician’s childhood experience on their policy choices. By exploiting exogenous variations in exposure to China’s Great Famine, we find that a provincial leader’s childhood experience of the famine significantly increases the share of government expenditure allocated to health care during his term. This effect is observed only for those who were aged under five during the famine and is not found among older cohorts. The impact is substantial: our back-of-the-envelope calculation indicates that an increase of one standard deviation in exposure to the famine can lead to an increase of roughly 7.84 billion RMB (equivalent to about 1.19 billion US Dollars) in annual provincial health care expenditure for a province with average government spending in 2017. We provide evidence suggesting that this effect may be driven by a politician’s personal experience of negative health outcomes due to the famine. Furthermore, we observe that China’s political promotion system, which favors economic growth, incentivizes provincial leaders to counterbalance increased health care spending by reducing funding for less visible public services, particularly cultural activities. Such strategic allocations ensure the continuity of other policy areas that are more influential in their political career.

Digitalization, Education And Employment Nexus Within The Scope of Life Long Learning: CRITIC Based Gray Relational Analysis Application

The European Union has developed many policies, decisions, strategies and projects on lifelong learning and has set some targets, especially in education, employment and competitiveness. Today's technological developments and the effects of these developments on education and employment cannot be ignored. In this study, within the scope of the objectives of lifelong learning in the EU, the technological developments in the EU countries, education and employment indicators and their performances are evaluated and the countries that come to the fore and fall behind are discussed. The aim of this study is to evaluate the performance of EU countries with the CRITIC-based Gray relational analysis method with some technology, education and employment data that are important within the scope of lifelong learning in the digitalized world. In particular, the education variables of individuals at higher education level who are educated with digital skills brought by our age and close to taking part in business life, employment of new graduates, unemployment with advanced education, the share of government expenditures spent on education in GDP, the share of the ICT Sector in GDP, which shows the effects of technology on employment, and the share of ICT experts in total employment. etc. variables are included in the scope of the study. With the help of the variables included in the study, according to the findings of the CRITIC method, it was seen that the most important first five criteria were students enrolled in Higher Education (12,11%), leave education and training early (9.32%), the share of the ICT Sector in GDP (8.38%), highly educated unemployment (8.08%), Total unemployment rate (-7.08%). However, in the Gray Relational Analysis findings using the weights obtained by the CRITIC method, Sweden, Finland, Spain, Denmark, Malta, Germany took the lead in the performance ranking by providing the balance of technology, education and employment, it has been found that countries such as Poland, Latvia, Croatia, and Slovenia are also in the last place. Key Words: Lıfelong Learnıng, Digitalization, Employment, GIA Method. Jel Cods: A20,C19, C44, D83, I3, O33.

The importance of public sector size and resources volatility in carbon emissions: Empirical evidence from OECD countries

Natural resources and environmental depletion are significant concerns for both developing and developed nations. Those challenges not only surge environmental risks but also result in extensive financial damages, leading to the provision of substantial funds each year for carbon mitigation strategies. The present study aims to inspect the impact of public sector size and natural resource volatility on environmental depletion by evaluating panel data from twenty OECD member countries. Based on data availability, the selected time frame for analysis is 1995–2021. The study employs the Augmented Mean Group (AMG) approach to address potential biases arising from cross-sectional dependence (CD) and slope heterogeneity. The findings depicted a positive relationship between public sector size, natural resource volatility, and carbon dioxide (CO2) emissions in selected OECD countries. The results underscore that an increased share of government expenditures and high natural resource volatility contribute to carbon emissions. These outcomes highlight the need to condemn the highly volatile consumption of natural resources to bring stability in the resources markets and also condemn irresponsible financing of environmentally unfriendly projects for the sake of a healthier environment. The study proposed that governments should pay attention to prioritizing environmental quality when utilizing natural resources or allocating funds across various sectors.

Health System Financing: A Comparative Analysis of India and Saudi Arabia

The objective of this study is to provide a comparative analysis of the health financing systems in India and the Kingdom of Saudi Arabia (KSA) across three major domains: resource mobilisation, pooling of resources and purchase of health services. This is an observational study using secondary data collected from international organisations, ministries of health and other government and non-government agencies in India and KSA. The study revealed that India has a very low expenditure on healthcare and markedly lower health outcomes compared to KSA. Although India’s health financing system has undergone notable changes in the last two decades, it is lagging behind in many health financing system parameters. However, the share of government expenditure on current health expenditure has been increasing steadily with higher allocations to primary and secondary care. By expanding health insurance coverage and sustainable public health funding, it is likely that India will make significant progress towards achieving UHC.

DAMPAK BELANJA PEMERINTAH DAERAH TERHADAP PERTUMBUHAN EKONOMI DAERAH: STUDI KASUS DATA PANEL PROVINSI DI INDONESIA

This study aims to identify the effect of government spending and other fiscal variables on economic growth and per capita income in 33 provinces in Indonesia. Other fiscal variables used are personnel expenditures, capital expenditures and goods and services expenditures. The data used is panel data in 33 regions in Indonesia, data obtained from Kemenkeu.go.id. The source of provincial-level data is obtained from the APBD summary issued by the Directorate General of Budget, Ministry of Finance of the Republic of Indonesia. The estimation method is Pooled Least Squares. The estimation results show that the variables of Government Expenditure, Government Expenditure per Capita, and share of Government Expenditure on GRDP have no effect on economic growth but positively affect income per capita. Meanwhile, other fiscal variables consisting of personnel expenditure, capital expenditure and expenditure on goods and services, in the form of total, per capita and share of GRDP, have a positive effect on economic growth and income per capita. The recommendation from this research is for the provincial government to map its spending well so that the goal of increasing people's income can be achieved.

Fiscal illusion of the stated preferences of government officials regarding interministerial policy packages: A case study on child labor in Afghanistan

Fiscal illusion refers to taxpayers’ perceptions of the gap between their burden and their expectations regarding the provision of public services. In this paper, we provide a comprehensive picture of the preferences of central government officials with respect to a hypothetical interministerial anti-child labor policy program. In our randomized conjoint analysis , the policy program consists of five attributes: (i) share of open-air classes; (ii) share of qualified teachers; (iii) provision of child allowance; (iv) female labor participation; and (v) an attribute related to the scale of budget, defined by either tax payment or share of government expenditure . The respondents were randomly assigned to two groups by assigning different fifth attributes. We compared the supporting rate for the proposed anti-child labor policy program between the two groups of 605 respondents: tax payment and share of government expenditure. Thus, our primary goal was to compare two attributes. We found that the average marginal component effects (AMCEs) between the two attributes showed completely opposite directions, suggesting that a significant fiscal illusion problem exists among central government officials working in Kabul. Moreover, women and staff in lower positions of government were found to be more biased. It should be noted that, due to insensitivity to the tax payment levels when they are set by the comparable range of scale of budget with the share of government expenditures, and our setting of the levels of two attributes on different scales, the study demonstrates a mere qualitative comparison. • Addressing child labor through interministerial policies. • Searching fiscal illusion problems among government officials rather than voters. • Using a randomized conjoint experiment to explore the concept of fiscal illusion. • Fiscal illusion was detected among Afghan bureaucrats due to their inconsistent preferences for funding policy sources.

Food policies and obesity in low- and middle-income countries

• We examine the implication of food policies on body weight outcomes. • An increase in tariff rate on “unhealthy” foods is associated with reduction in obesity rates. • An increase in subsidy rate is associated with higher obesity rates. • These implications of these food policies are more pronounced among poorer individuals. • We highlight heterogenous implications of trade and fiscal policies. Understanding the public health implications of food policies is crucial to combat recently increasing overweight and obesity rates in many low-and-middle income countries (LMICs). This study examines the implication of food policies, mainly tariff rates on “unhealthy” foods (sugar and confectionery products as well as fats and oils) and governments’ subsidies, on individuals’ body weight outcomes. We compile several macro- and micro-level datasets that provide macro-level information on food policies and micro-level anthropometric data for several LMICs. We exploit temporal dynamics in tariff rates on “unhealthy” foods and governments’ spending on subsidies to estimate fixed effects models characterizing the evolution of body weight outcomes. We find that temporal dynamics in tariff rates on unhealthy and energy-dense foods are significantly and negatively associated with body weight. Conditional on several observable and time-invariant unobservable factors, a decrease in tariff rates on sugar and confectionary foods or fats and oils is associated with an increase in overweight and obesity rates. On the other hand, an increase in subsidy rate, as a share of government expenditure, is significantly associated with higher overweight and obesity rates. Interestingly, we find that the implications of these food policies are more pronounced among poorer individuals. This may be explained by the fact that poorer households usually spend a larger share of their income on food consumption or unhealthy foods; and that poorer individuals are often beneficiaries of government subsidies in many LMICs. These findings have important implications for informing public health policies in LMICs, which are experiencing an unprecedented rise in overweight and obesity rates.

GOVERNMENT EXPENDITURES WITHOUT GROWTH: THE CASE OF TURKEY

Share of government expenditures in the GDPs are increasing virtually everywhere. Available data for developed countries indicate that the beginnings of this upward trend date back to the mid-19th century. Interestingly, economic growth rates did not increase significantly over time despite the increases in government expenditures. Low income countries today spend more than the double of what today’s developed economies were spending on average in 1900. However, this is not helping them to converge to richer economies. Why are government expenditures increasing then? This question might have global pertinence but due to the variety of country-specific factors, it can be best studied on a single country level. In this article, the country of focal interest is Turkey. Five important variables that might affect government expenditures from different angles are evaluated regarding their contributions to the out-of-sample predictions of government expenditures using random forest methodology. Military expenditures are estimated as primarily important for determining the government expenditures in Turkey in the last fifty years, while tax collections happened to be the second most important factor affecting the ups and downs of government expenditures around a time-varying average line. Per capita income, urbanization and inflation also affect government expenditures in various ways.

KRA Second University Symposium, 9th October 2020—Impact of Technology on Tax Administration

This study investigates the theoretical basis for revenue mobilization and the role of technology in tax administration. Public finance theory supports the growth of the share of government expenditures to GDP with implications of constraints for public investment financing. The equilibrium predicted in the theory of loanable funds is no longer sustainable because of shortage of domestic savings creating a situation of excess demand for funds to finance public investments. Leveraging on technology can be an important administrative policy for boosting revenue mobilization. The study concludes that both tax administration reforms and quality of governance are complementary to technology in tax revenue mobilization in the developing economies.

Instruments of energy subsidy reforms in Arab countries — The case of the Gulf Cooperation Council (GCC) countries

Energy subsidies can account for a large share of government expenditures in some GCC countries. In light of fiscal imbalances since 2014, these countries have reiterated their intention to decrease subsidies and substitute them with more targeted support systems. This paper briefly outlines the extent of energy subsidies. The scope and the drivers of the subsidy reform agenda are outlined, citing recent literature. Some instruments are explained such as adjustment of electricity or water tariffs, increasing of fuel prices, and compensation of citizens through cash transfers. However, the adopted reforms are not yet comprehensive and do not alter the social contract of rentier states.

Measuring Efficiency of the New Zealand District Health Boards: An Empirical Research Using Two‐Stage Data Envelopment Analysis

Health care is one of the core public services in New Zealand and consumes the second largest share of government expenditure. It is thus important to monitor the technical efficiency of the health services. We employ a two‐stage Data Envelopment Analysis of New Zealand District Health Boards (DHBs) data over the period from 2013/2014 to 2016/2017 and found that DHBs generally improved their technical efficiency during this time. Our results suggest that further improvements to efficiency might be possible through greater attention to budget preparation, improvements to building asset utilisation and optimisation of patient flow at emergency departments.

Budget strategy in the conditions of economic globalization

Economic changes create a strong need for the reconsideration of the system of financial and budgetary knowledge and paradigms already created in developed countries regarding the possibility of their use in the countries with developing economies. In this article, the authors clarify that the process of formation of the efficient and mutually agreed budget policy with strategic tasks of the social and economical development of countries requires development of the budget strategy. Its essence is the dynamic realization of the system of goals, principles, directions, tasks of state authorities, co-ordination and adequacy of their long-term regulatory measures to internal and external changes in the economic environment and social transformations aimed at ensuring macroeconomic stability, accelerating economic growth and improving the well-being of the population. The principles of budget strategy development have been clearly defined: scientific substantiation; integrity; efficiency; systematic approach; adaptability; variability; interdependence; purposefulness; sociality; legitimacy. The share of government expenditures, budget deficit and public debt in the gross domestic product in the EU and Ukraine has been estimated. The priority directions of budget strategies in the conditions of economic transformations have been defined, in particular, regarding the increase of efficiency of public expenditures and establishment of restrictions on their level of growth; improvement of the mechanism for managing budget deficits, public debt and guarantees and reduction of their limits. The research has demonstrated a huge influence of the budget strategy on the social and economical processes and on the development of the social relations.

Fiscal policy, institutions and inclusive growth: evidence from the developing Asian countries

Purpose The purpose of this paper is to examine the impact of fiscal policy and institutional quality on the inclusive growth process of the selected developing Asian countries. Inclusive growth is a growth process which ensures that everyone is participating and benefited by growth process. Design/methodology/approach This study uses system generalized method of moment to address the problem of endogeneity and omitted variable bias. Findings Empirical results showed that both fiscal policy and institutions have positive effects on inclusive growth. Our empirical results confirmed that fiscal policy can work more efficiently in the presence of good quality institutions in the developing Asian countries. Research limitations/implications Government should take measures to improve infrastructure, roads and transport system, and main share of government expenditures should be allocated to development, education and health projects. There is a need to transform the tax structure of the countries with the huge emphasis on the progressive tax system and this is likely to benefit the lower segment of the population. There is a need to develop institutions as they serve as a road map for the development of a country. There should be coordination between government policies and institutions. Supervision of fiscal policy through good institutions is needed for the proper allocation and utilization of public resources. Practical implications By restructuring the taxation system subject to the provision of quality institutions, government can incentivize entrepreneurs to make significant investments. This creates jobs for lower segment of a society, brings down poverty and increases the income level of a country. This increases the individual and collective welfare of an economy that ensures the inclusive growth within a country. Originality/value In this study, proxies used for fiscal policy are government expenditures and tax revenues as a percentage of gross domestic product (GDP) to examine its impact on the certain measures of inclusive growth such as employment, income inequality and GDP per capita. This study provides useful insights for the policy makers using fiscal policy to achieve the goal of inclusive growth in developing countries.

Income Inequality and the Size of Government: A Causal Analysis

Expansion of the public sector and redistributive policies may reduce income inequality, but formal tests suffer from the problem of endogeneity of government size with respect to the distribution of income. Studying 30 European countries over the period 2004-2015, we apply instrumental variable estimation techniques to identify a causal relationship between income inequality and government size, measured as the government expenditure share in GDP. Using a novel instrument – the number of political parties in the ruling coalition – we find that accounting for the possible endogeneity of government size increases the magnitude of the estimated negative effects. Our findings thus suggest that much of the literature underestimates the true role of the government in attenuating income inequality. The estimated relationship between income inequality and government size persists in a series of robustness checks.

Structural adjustment, state capacity and child health: evidence from IMF programmes.

Consensus is growing that policy reform programmes by the International Monetary Fund (IMF)-an international organization mandated with upholding global financial stability and assisting countries in economic turmoil-produce adverse effects on public health. However, this consensus is unclear about which policies of these programmes underlie these effects. This article fills parts of this gap by examining the impact of four kinds of IMF policies (fiscal policy, public-sector employment, privatization of state-owned enterprises and price liberalization) on public-health expenditure, child vaccination and child mortality. We conducted time-series cross-section analyses for up to 128 developing countries over the 1980-2014 period using observational data on health outcomes and IMF conditionality for different policy areas. IMF effectiveness research faces two types of potential biases: self-selection into IMF programmes and IMF policy conditions. We deployed instrumental variables in a seemingly unrelated regression framework to address both types of endogeneity, besides traditional remedies such as the use of fixed effects on countries and years. IMF policy conditions on public-sector employment are negatively related to child health. A change from the minimum to the maximum number of such policy conditions decreases vaccination (which ranges from 0 to 100) by 10.97% [95% confidence interval (CI): 1.16 to 20.79]. This effect is robust against different sets of control variables. In addition, IMF programmes increase the share of government expenditure devoted to public health in developing countries by 0.91 percentage points (95% CI: 0.15to 1.68). These findings suggest that IMF policies-particularly those that require public-sector reforms-undermine health by weakening the capacity of states to deliver vaccination. Therefore, international financial institutions need to increase their awareness of the public-health impact of their policy prescriptions. Strengthening state capacity in times of economic crisis would ensure that increased health spending also delivers quality healthcare.

Identification of hospital cost drivers using sparse group lasso.

Public hospital spending consumes a large share of government expenditure in many countries. The large cost variability observed between hospitals and also between patients in the same hospital has fueled the belief that consumption of a significant portion of this funding may result in no clinical benefit to patients, thus representing waste. Accurate identification of the main hospital cost drivers and relating them quantitatively to the observed cost variability is a necessary step towards identifying and reducing waste. This study identifies prime cost drivers in a typical, mid-sized Australian hospital and classifies them as sources of cost variability that are either warranted or not warranted—and therefore contributing to waste. An essential step is dimension reduction using Principal Component Analysis to pre-process the data by separating out the low value ‘noise’ from otherwise valuable information. Crucially, the study then adjusts for possible co-linearity of different cost drivers by the use of the sparse group lasso technique. This ensures reliability of the findings and represents a novel and powerful approach to analysing hospital costs. Our statistical model included 32 potential cost predictors with a sample size of over 50,000 hospital admissions. The proportion of cost variability potentially not clinically warranted was estimated at 33.7%. Given the financial footprint involved, once the findings are extrapolated nationwide, this estimation has far-reaching significance for health funding policy.

Economic growth and government size in developed European countries: A panel threshold approach

Based on the literature on economic growth, there is a non-linear relationship between government size and economic growth, which is usually similar to an inverted U-shaped curve and is used to determine the optimum share of government expenditure. The present study aims to investigate the non-linear relationship among 14 developed European countries during 1995–2014. Final consumption expenditure to gross domestic product (FCE), current expenditure other than final consumption to gross domestic product (OCE), and government gross fixed capital formation to gross domestic product (GFCF) were considered for measuring government size. The results indicate an asymmetric effect of FCE and GFCF on economic growth when they are above and below the optimal level. The optimum values of FEC and GFCF were estimated to be 16.63 and 2.31%, respectively. However, it is noted that OCE always has a negative effect on economic growth. In terms of policy prescriptions, governments of developed countries should be aware that misallocation of public expenditure can occur given it may likely become unproductive after passing an optimal size.