State Government Spending Research Articles

Factors influencing household expenditure on school education in Karnataka

Private expenditure on school education is one of the sources of education expenditure other than state and central government spending. The 86th Constitutional Amendment Act 2002, and the Right to Education (RTE) Act, 2009 introduced a rights-based approach to free and compulsory education for all children in the age group of six to fourteen years in India. Under the Right to Education (RTE) Act, a limited number of seats are allocated for free education to economically backward sections in private and private-aided schools. Despite the free education for students in government schools and RTE admissions in private schools, parents incur considerable expenditure. With the increase in the number of private schools, there is an increasing trend in private expenditure on education in India. In this context, this paper analyses factors influencing household expenditure on school education. It is based on primary data collected at the household level in Mysuru district in both rural and urban areas through a survey. The sample consists of 192 households each from urban and rural areas selected randomly from the list available at the schools. Factors influencing the education expenditure of the households on school education were estimated through a linear regression model. Annual Household Income (AHHI), Occupational Status of Father (OSF), Location of Household (LHH), Education Level of Mother (ELM), Education Level of Father (ELF) and Type of Institution (TI) have a positive and significant relationship with total Annual Household Education Expenditure (AHHEE) of the first child in school. In the case of a second school-going child, only Annual Household Income (AHHI) and Type of Institution (TI) were found to have a significant relationship with Annual Household Education Expenditure (AHHEE).

Unconditional federal transfers and state government spending: The flypaper effect in Nigeria and South Africa

The flypaper effect is undoubtedly among the most interesting concepts in subnational government spending behavior. This study is the first attempt to provide empirical evidence on the existence of the flypaper effect in the two largest economies in Sub-Saharan Africa: Nigeria and South Africa. Using the two-step system generalized method of moment’s estimator, our results show that the flypaper effect exists for both state and provincial governments in Nigeria and South Africa. Provincial governments in South Africa are found to be more responsive to positive changes in unconditional federal transfers than state governments in Nigeria. We therefore recommend sen­sitization on the receipt and disbursement of unconditional federal transfers. This will help reduce the illusion or information asymmetry about the use of unconditional federal transfers.

Understanding State and Local Government Spending over the Business Cycle

Understanding State and Local Government Spending over the Business Cycle

Estimating funds required for UHC within Indian States.

Universal Health Coverage (UHC) has been high on national and international agendas since its adoption as one of the Sustainable Development Goals (SDGs). Within India, there is a wide variation in the total amounts per capita spent by each state government (Government Health Expenditure or GHE) on healthcare. Bihar, with a GHE of 556 per capita (per annum), has the lowest state government spending, but there are many states in which governments spend more than four times that amount on a per capita basis. However, despite this, no state offers UHC to its residents. This failure to provide UHC could be because even the highest amounts spent by the state governments are too low for them to offer UHC or because the cost differences between states are very high. It is also possible, however, that a poor design of the government-owned health system and the degree of waste embedded within it could account for this. It is important to understand which of these factors is responsible because it then provides a clue as to what the best path to UHC might be in each state. One way to do that would be to arrive at one or more broad estimates of the amounts needed to finance UHC and to compare them with actual amounts being spent by the governments in each state. Older research provides two such estimates. In this paper, using secondary data, we add to them using four additional approaches so that we can build greater confidence in the estimation of amounts needed by each state to offer UHC to its residents. We refer to these as Outside-in, Actuarial, Normative, and Inside-Out. We find that, with the exception of the approach which assumes that the current design of the government health system is optimal and only needs added investment to offer UHC (the Inside-out approach), all the other approaches give a value of between 1302 and 2703 per capita for UHC, with 2000 per capita providing a reasonable point estimate. We also find no evidence to support the view that these estimates are likely to vary between states. These results suggest that several Indian states may have an inherent ability to offer UHC with government financing alone and that a high degree of waste and inefficiency in the manner in which government funds are currently being deployed may well be behind their apparent inability to do so already. Another implication of these results is that several states may also be further away from the goal of offering UHC than an initial analysis of their GHE as a proportion of their Gross State Domestic Product (GSDP), i.e., GHE/GSDP, may suggest. Of particular concern are the states of Bihar, Jharkhand, Madhya Pradesh, and Uttar Pradesh, all of which have GHE/GSDP greater than 1%, but because their absolute levels of GHE are well below 2000, in order to reach UHC, they may need to more than triple their annual health budgets. The Christian Medical College Vellore supported the second author (Sudheer Kumar Shukla) through a grant from the Infosys Foundation. Neither of these two entities had any role in the study design, data collection, data analysis, interpretation, writing of the manuscript, or the decision to submit it for publication.

Associations Between State and Local Government Spending and Pregnancy-Related Mortality in the U.S.

There is limited evidence on how government spending is associated with maternal death. This study investigates the associations between state and local government spending on social and healthcare services and pregnancy-related mortality among the total, non-Hispanic Black, Hispanic, and non-Hispanic White populations. State-specific total population and race/ethnicity-specific 5-year (2015-2019) pregnancy-related mortality ratios were estimated from annual natality and mortality files provided by the National Center for Health Statistics. Data on state and local government spending and population-level characteristics were obtained from U.S. Census Bureau surveys. Generalized linear Poisson regression models with robust SEs were fitted to estimate adjusted rate ratios and 95% CIs associated with proportions of total spending allocated to social services and healthcare domains, adjusting for state-level covariates. All analyses were completed in 2021-2022. State and local government spending on transportation was associated with 11% lower overall pregnancy-related mortality (adjusted rate ratio=0.89, 95% CI=0.83, 0.96) and 9%-12% lower pregnancy-related mortality among the racial/ethnic groups. Among spending subdomains, expenditures on higher education, highways and roads, and parks and recreation were associated with lower pregnancy-related mortality rates in the total population (adjusted rate ratio=0.90, 95% CI=0.86, 0.94; adjusted rate ratio=0.87, 95% CI=0.81, 0.94; and adjusted rate ratio=0.68, 95% CI=0.49, 0.95, respectively). These results were consistent among the racial/ethnic groups, but patterns of associations with pregnancy-related mortality and other spending subdomains differed notably between racial/ethnic groups. Investing more in local- and state-targeted spending in social services may decrease the risk for pregnancy-related mortality, particularly among Black women.

Modeling Analysis of Economic Growth in Asia with a Dynamic Panel Approach Generalized Method of Moment (GMM)

Purpose: High growth is expected to overcome various economic problems. Therefore, various efforts have been made by the government in synergy with other related institutions as a form of optimization of economic growth. That is why economic growth is an important indicator for the development of a country. This study aims to analyze economic growth and the factors that influence economic growth in Asia during the 2000-2019 period using dynamic panels.
 Design/methodology/approach: The independent variables in this study are the human development index (HDI), changes in exports (PEXPORT) and government spending (EXPENGOV) using the GMM system method as a model for modeling economic growth. The GMM model system is the best model with Sargan testing. The data used in this study are in the scope of Asia with the number of observational studies that are 11 (eleven) with a total panel data turned on by the state observation system 209. 
 Findings: The results show that the human development index (HDI) has a negative and significant effect on economic growth in Asia 2000-2019 period. Meanwhile, the export change variable (PEXPORT) and government expenditure (EXPENGOV) had a positive and significant effect on economic growth in Asia for the 2000-2019 period.
 Research limitations/implications: Furthermore, economic growth also strengthened the previous year's economic growth at a significance level of 1%. This shows that economic growth is economic growth, economy, economy, and state government spending.
 Originality/value: This paper is an original
 Paper type: Research paper

Medicaid Expansion and Avoidable Emergency Department Use—Implications for US National and State Government Spending

Medicaid Expansion and Avoidable Emergency Department Use—Implications for US National and State Government Spending

Government Allocation and Economic Growth: An Empirical Evidence from States in Malaysia

Academic researchers are still interested in government fiscal management and its economic consequences. The impact of federal government fiscal policy on the economy has gotten a lot of attention. Nonetheless, little is known about state-level fiscal management. The main goal of this research is to investigate the relationship between state government fiscal and economic growth across Malaysia's states. We also investigate the economic impact of the federal government's contribution on each state's budget allocation. We identified disparities in federal funding. We use a panel dataset that spans 13 Malaysian states and ten years, from 2008 to 2017. We found that government spending drives growth in domestic products for most state governments using the panel autoregressive distributed lag (ARDL) model. The Granger causality test reveals that state government spending and federal allocation to states significantly impact Malaysian state economic growth. In general, our empirical evidence backs up Wagner's theory.

Effectiveness of fiscal federalism for poverty reduction in Nigeria: an analysis of federal and state governments’ expenditures

One of the sustained political and economic strategies that have been adopted by various countries over 3 decades to achieve the desired level of development is fiscal federalism. Through this economic development strategy, various levels of government within an economy have been involved in the pursuit of reducing poverty overtime. The purpose of this study is to examine the relationship between government expenditure on poverty reduction with respect to federal and state government expenditures, respectively. The study employed the auto-regressive distributed lag (ARDL) estimation technique to establish long-run relationship, and to examine the magnitude of the effect of federal and state government expenditures in both the short-run and long-run periods using time-series data for the period 1981–2018. Results obtained indicate that only state government expenditure has positive effect on poverty reduction in Nigeria. The findings of this study, therefore, support the need for greater decentralization and increase in fiscal expenditure responsibilities and strengthening revenue capability in favor of state governments, giving that achieving desired poverty reduction could be achieved through increased state government spending on developmental projects.

The economic value of beach nourishment in South Carolina

Tourism has become increasingly important in South Carolina’s economy, particularly beach tourism that accounts for two-thirds of tourist spending. Maintaining beaches is a requirement for a successful beach tourism industry. In the past 30 years, about 1.7 million yd3 of sand has been placed annually on South Carolina beaches. The annual cost has been $20.2 million in 2019 dollars or $13.9 million (2019 dollars) if federal mitigation and emergency sand placements are not included because their purpose was not in support of tourism. Beach nourishment has been very successful in combating shoreline recession. From 1984-1987 through 2006, South Carolina shorelines that were not nourished receded 101 ft on average, and shorelines that were nourished advanced 110 ft on average — and tourism boomed. South Carolina beach tourists generate $16.6 billion annually in South Carolina economic development and about $1.8 billion in taxes. For each $1 spent on beach nourishment, South Carolina receives over $1,200 in economic development generated by beach tourists and federal, state, and local governments receive almost $130 in taxes. Beach tourists have options, and with the state government spending only $3.1 million annually on beach nourishment versus the Florida state government spending $50 million on Florida beaches, South Carolina must be careful to maintain its beaches to continue attracting tourists at record levels.

What drives road infrastructure spending?

AbstractIt is widely believed that basic infrastructure in the United States has been seriously underfunded in recent years. We examine this broad issue by focusing on two specific questions. First, how has subnational government spending on infrastructure changed over the last half‐century, focusing especially on transportation spending? Second, what factors have driven these spending changes? To answer these questions, we collect data on local, state, and combined state and local government spending on roads and other expenditure categories from 1957 to 2013. With these data, we first demonstrate that infrastructure spending has increased on average in real per capita terms across all states, even while it has declined significantly across all states as a percentage of government spending. Second, we also examine empirically several causal factors that help explain what has driven these changes in transportation spending over time, using several estimation methods and robustness tests. We find suggestive evidence that it is primarily changes in government spending on welfare programs that have driven these sizeable changes in transportation spending. Indeed, we calculate that, if state governments were spending the same percentage of their budgets on transportation in 2013 as they had been in 1957, then state government spending on transportation across all states would increase in total by an additional $133.5 billion in 2013, an amount equal to an additional $422 per capita.

Mortality versus Municipal and State Government Spending in American Cities.

The USA leads the world in healthcare spending but trails dozens of countries in life expectancy. Government spending may reduce overall mortality by redistributing resources from the rich to the poor. We linked mortality data from 2006 to 2015 to municipal and state government spending in 149 of the largest American cities. We modeled the association of mortality with city and state government spending per capita in 2005 using weighted linear regression. A 10% increase in state government expenditures was associated (P = 0.008) with a 1.4% (95%CI: 0.4-2.4%) reduction in mortality in American cities. Total city government expenditures were not associated with mortality (P > 0.10). However, among Whites, increases in city government spending were associated with a reduction in mortality of 4.8% (2.1-7.5%), but among Blacks and Asians, increased city government spending was associated with respective mortality increases of 1.7% (0.6-2.9%) and 5.1% (2.1-6.2%). State government spending is associated with reduced mortality in American cities. City government spending appears to benefit White longevity and hurt non-White longevity.

Analyzing state government spending: balanced budget rules or forward-looking decisions?

We analyze US state government spending behavior with a general intertemporal model allowing for asymmetry in balanced budget rules in a panel data setting. We find no strong evidence for forward-looking behavior in state spending; balanced budget rules are a significant constraint. States with budget rules imposing lighter restrictions are more likely to exhibit habit formation, while those with stricter rules demonstrate asymmetric responses to revenue changes. Evidence for a precautionary savings motive is limited. Balanced budget requirements trigger substantial pro-cyclical spending, possibly amplifying state economic volatility for states with tight fiscal rules, especially after revenue increases.

The prospects for sustaining evidence-based responses to the US opioid epidemic: state leadership perspectives

BackgroundThe US 21st Century Cures Act provided $7.5 billion in grant funding to states and territories for evidence-based responses to the opioid epidemic. Currently, little is known about optimal strategies for sustaining these programs beyond this start-up funding.MethodsUsing an inductive, conventional content analysis, we conducted key informant interviews with former and current state leaders (n = 16) about barriers/facilitators to sustainment and strategies for sustaining time-limited grants.ResultsFinancing and reimbursement, service integration, and workforce capacity were the most cited barriers to sustainment. Status in state government structure, public support, and spending flexibility were noted as key facilitators. Effective levers to increase chances for sustainment included strong partnerships with other state agencies, workforce and credentialing changes, and marshalling advocacy through public awareness campaigns.ConclusionsUnderstanding the strategies that leaders have successfully used to sustain programs in the past can inform how to continue future time-limited, grant-funded initiatives.

State and Local Government Expenditures and Infant Mortality in the United States.

Evidence suggests that government expenditures on non-health care services can reduce infant mortality, but it is unclear what types of spending have the greatest impact among groups at highest risk. Thus, we sought to quantify how US state government spending on various services impacted infant mortality rates (IMRs) over time and whether spending differentially reduced mortality in some subpopulations. A longitudinal, repeated-measures study of US state-level infant mortality and state and local government spending for the years 2000-2016, the most recent data available. Expenditures included spending on education, social services, and environment and housing. Using generalized linear regression models, we assessed how changes in spending impacted infant mortality over time, overall and stratified by race and ethnicity and maternal age group. State and local governments spend, on average, $9 per person. A $0.30 per-person increase in environmental spending was associated with a decrease of 0.03 deaths per 1000 live births, and a $0.73 per-person increase in social services spending was associated with a decrease of 0.02 deaths per 1000 live births. Infants born to mothers aged <20 years had the single greatest benefit from an increase in expenditures compared with all other groups. Increased expenditures in public health, housing, parks and recreation, and solid waste management were associated with the greatest reduction in overall IMR. Investment in non-health care services was associated with lower IMRs among certain high-risk populations. Continued investments into improved social and environmental services hold promise for further reducing IMR disparities.

Sovereign Currency and Non‐Sovereign Budgets: The Modern Money Theory Approach

This paper will present the Modern Money Theory approach to government finance. In short, a national government that chooses its own money of account, imposes a tax in that money of account, and issues currency in that money of account cannot face a financial constraint. It can make all payments as they come due. It cannot be forced into insolvency. While this was well‐understood in the early post‐war period, it was gradually “forgotten” as the neoclassical theory of the household budget constraint was applied to government finance. Matters were made worse by the development of “generational accounting” that calculated hundreds of trillions of dollars of government red ink through eternity due to what neoconservatives label “entitlements” (largely, Medicare and Social Security). As austerity measures were increasingly adopted at the national level, fiscal responsibility was shifted to state and local governments through “devolution.” A “stakeholder” approach to government finance helped fuel white flight to suburbs and produced “doughnut holes” in the cities. To reverse these trends, we need to redevelop our understanding of the fiscal space open to the currency issuer—expanding its responsibility not only for national social spending but also for helping to fund state and local government spending. This is no longer just an academic debate, given the challenges posed by climate change, growing inequality, secular stagnation, and the rise of Trumpism.

A comparative analysis of periodicity in the Arkansas state budget process

PurposeThe purpose of this paper is to explore the impact of changes to the Arkansas budget process brought about when the people of Arkansas voted to move from a biennial to an annual budget period in 2008. The paper describes the legislative changes necessary for annual budget review and explores the impact of annual budget review on revenue forecasting, supplemental appropriations, special sessions, legislative staff workload, executive branch oversight and state spending. This research assesses legislative perceptions of annual budget review across several factors including knowledge of the state budget, ability to check the powers of the governor and overall efficacy of annual budget review.Design/methodology/approachThis exploratory research uses interview data from the Legislative Fiscal Director and data from an online survey of Arkansas state legislators. The interview and survey data were supplemented by an analysis of documents produced by legislative staff regarding supplemental appropriations, special sessions and state general revenue.FindingsThe Legislative Fiscal Director interview indicates that the change in budget period had little impact on revenue forecasting, special sessions and state government spending, with the exception that supplemental appropriations for Big 6 agencies increased in a statistically significant way following the advent of the fiscal session. The legislative survey finds that the change in budget period is viewed positively by Arkansas legislators. Most legislators indicated that they prefer annual budget review to biennial budget review.Research limitations/implicationsBecause of the exploratory approach, the research results may lack generalizability.Originality/valueThis paper surveys legislators on the efficacy of annual budget review which has seldom been done in previous research.

Fiscal Reform to Benefit State and Local Governments: The Modern Money Theory Approach

This paper will present the Modern Money Theory approach to government finance. In short, a national government that chooses its own money of account, imposes a tax in that money of account, and issues currency in that money of account cannot face a financial constraint. It can make all payments as they come due. It cannot be forced into insolvency. While this was well understood in the early postwar period, it was gradually forgotten as the neoclassical theory of the household budget constraint was applied to government finance. Matters were made worse by the development of generational accounting that calculated hundreds of trillions of dollars of government red ink through eternity due to entitlements. As austerity measures were increasingly adopted at the national level, fiscal responsibility was shifted to state and local governments through devolution. A stakeholder approach to government finance helped fuel white flight to suburbs and produced doughnut holes in the cities. To reverse these trends, we need to redevelop our understanding of the fiscal space open to the currency issuer--expanding its responsibility not only for national social spending but also for helping to fund state and local government spending. This is no longer just an academic debate, given the challenges posed by climate change, growing inequality, secular stagnation, and the rise of Trumpism.

It’s Not Just Welfare: Racial Inequality and the Local Provision of Public Goods in the United States

Recent research shows that inequality between racial groups is a critical determinant of redistributive policy in the United States. Using various measures of local and state spending and examining multiple levels of geographical and political jurisdictions, we extend this research to government spending on local public goods. Specifically, we examine (1) whether the extent to which income inequality falls along racial lines dampens local and state government spending on public goods, (2) which types of public goods are most affected by the racial structure of inequality, and (3) whether political variables such as local leaders’ racial identities and party affiliation mediate the relationship between racial inequality and spending on public goods. The findings reaffirm the need to consider racial diversity and inequality jointly as influences on policy.

Easy on the SALT: A Qualified Defense of the Deduction for State and Local Taxes

Congressional Republicans and Trump administration officials have said that they plan to repeal the deduction for nonbusiness state and local taxes (SALT) as part of a comprehensive tax reform package. This essay critically examines the major arguments for repealing the SALT deduction. Repealing the deduction and using the resulting revenues to reduce federal rates across the board would likely lead to greater tax-induced deadweight loss overall. Repealing the deduction also would distort decisions about the financing of education and health care, which together account for more than half of all state and local government spending. Repeal would further encourage a shift from nonbusiness to business taxes at the state and local level, and potentially would result in more borrowing by subnational governments in the short and medium term. It would have ambiguous effects on the progressivity of the overall tax system, and it would exacerbate existing differences in federal tax burdens across states. The essay concludes that the case against the SALT deduction fails on its own terms, and that the status quo of partial deductibility offers a number of underappreciated advantages vis-a-vis the alternative of full repeal.