Subsidies Research Articles

Assessing the Impact of Fuel Subsidy Removal on Economic Growth in Nigeria: A VECM Approach

The yearly budgetary allocation on subsidy in Nigeria has remained a concern for policymakers and other agents of the economy as to whether it has achieved the targeted goal of economic growth in Nigeria. Thus, this study examined the impact fuel subsidy payments had on economic growth in Nigeria from 2005 to 2023. Secondary data were sourced from the Central Bank of Nigeria (CBN) Statistical Bullentin, the World Bank World Development Indicator (WDI) and the Nigerian Extractive Industry Transparency Initiative (NEITI) working paper. The data were converted into quarterly data for ease of analysis and estimation. Gross Domestic Product (GDP) growth rate was used as the dependent variable while Fuel Subsidy Expenditure (FSE), Exchange Rate (EXC) and Inflation Rate (INF) were the independent variables. The long run relationship among the variables was confirmed using the Johansen Co-integration technique while the Vector Error Correction Model (VECM) technique of analysis was adopted for estimation of the data. The study found that a negative significant relationship exists between fuel subsidy expenditure and economic growth in Nigeria within the period under study. The study therefore recommends a re-direction of government expenditure on subsidy to other critical area of the economy that can propel the growth of the economy.

Barriers to Electrification: Analyzing Critical Delays and Pathways Forward

This paper extensively explores the intricate nuances surrounding the delayed transition to new business models for electric vehicles. While there is commendable clarity regarding stakeholders, model possibilities, emission-reduction strategies, state aid initiatives, and citywide prohibitions, the central challenge lies in the gradual pace of this transition. Notably, the persistent high costs of electric vehicles, primarily attributed to exorbitant battery prices and the raw materials involved, represent a formidable hurdle to widespread adoption. In this article, a comprehensive examination of the multifaceted aspects contributing to the delays in the shift towards electrified transport is proposed. By meticulously scrutinizing the intricacies of this delay, the aim is to provide valuable insights that can contribute to accelerating the adoption of electric vehicles. The exploration of these challenges is essential for fostering a nuanced understanding of the impediments hindering the transition and, subsequently, for devising effective strategies to overcome them. The analysis presented herein not only identifies the hurdles but also seeks to offer potential solutions and strategies that can drive the transformative change needed in the realm of electric transportation. Understanding and mitigating the barriers impeding the transition is crucial for fostering a rapid and successful shift towards electric mobility in Spain, ensuring a sustainable and efficient transportation landscape for the future.

German Charity and Mutual Aid Societies in St. Petersburg (late 18th ‒ early 20th centuries)

The study of charity in the Russian Empire has an extensive historiography. The specifics of its implementation in various ethnic groups are often beyond the scope of the study. The purpose of this research is to identify German charitable organizations that have become the elements of the civil society that has been formed in the capital. New forms of unification of citizens and colonists became one of the manifestations of modernization, which was later adopted by other groups of metropolitan residents. The basis of this research is made up of various types of published and archival sources, some of which are being introduced into scientific circulation for the first time. German charitable organizations have existed in St. Petersburg since the 1770s. Initially, they arose at parish churches and had religious orientation. Since the 1860s, German artisans and colonists initiated creation of funeral registers, which have been widely distributed throughout Russia since the 1880s. Being independent of the state, charitable organizations and mutual aid societies became an important indicator of the modernization of Russian society in the 19th and early 20th century. The article is intended for specialists and anyone interested in the social history and history of Russian Germans.

The impact of fast-food energy posting on college students’ food purchases

BackgroundThe Patient Protection US Affordable Care Act (ACA) energy posting mandate requires restaurant chains to disclose information on the energy content of their food items. Assessments of the effect of menu energy labeling on dietary choices have reported inconsistent findings. ObjectivesThis study examined the impact of menu energy labeling on food items purchased by college students after the mandate was enacted nationally. MethodsStudent food sales data from purchases made at 3 fast-food restaurants during the 2017/2018 and 2018/2019 academic years at a university campus were used for the analysis. The total sample included 1662 students on the university meal plan; these students generated 145,295 food transactions at the restaurants over the study period. We utilized a difference-in-differences (DiD) empirical strategy, comparing changes in transaction-level energy purchases at 2 fast-food restaurants B and C (FFRB and FFRC – treatment groups) that posted energy information in the summer of 2018 with another fast-food restaurant A (FFRA – control group) that began posting energy information before the study period. ResultsWe observed increases in the mean energy content per transaction after implementing the menu-labeling policy. The DiD estimates found an increase of 20.6 in the mean calories of energy purchased per transaction at the treatment restaurants relative to the control restaurant. In the subgroup analyses, the DiD estimates indicated calories of energy increased: 18.7 for female students, 20.5 for male students, 23.5 for non-Hispanic Black students, 30.2 for students eligible for federal financial aid, and 19.9 for students not eligible for federal financial aid. ConclusionsThe results suggest that the ACA energy menu-labeling policy led to an increase in the energy content per transaction by students at a public university. This paper highlights the need for more research to better understand the determinants of food choice among college students.

Research on Sales of New Energy Vehicles Based on ARIMA Model

Firstly, this article identifies seven indicators based on electric vehicles: battery endurance, number of public charging facilities, government subsidies, gasoline prices, electricity prices, carbon emissions, and number of power battery companies. Spearman correlation analysis is conducted between indicator data and sales of new energy electric vehicles. The correlation coefficients of the first five indicators are all greater than 0.6, which is the main influencing factor. Then, the sales of new energy vehicles are predicted using a yearly forecasting method. Due to the close correlation between the sales of new energy vehicles and the five main indicators, the ARIMA time series model is first used to predict the annual quantity of the five indicators. Then, using these five indicators as inputs and sales as outputs, a BP neural network model is established to predict the annual sales of new energy vehicles in China to be 46051748 units in ten years. Finally, quantifying the score of ecological environment assessment using four evaluation indicators: sulfur dioxide, smoke emissions, ammonia nitrogen, and carbon dioxide. The entropy weight method was used to determine the weights of each indicator, and the results were 37.25%, 30.96%, 21.24%, and 10.55%, respectively. Then apply it to the TOPSIS model to obtain ecological environment scores for different years, and analyze the correlation between the degree of electrification and ecological environment scores. Finally, it can be concluded that the larger the market share of new energy vehicles, the better the ecological environment.

ASEAN Financing Climate Policy: The Effect of Fossil Fuel Subsidies on CPI and GHGs

Abstract The Association of Southeast Asian Nations (ASEAN) employs fossil fuel subsidies to promote economic development, although such action may have a negative effect on the environment. This study employs panel data analysis to examine whether ASEAN’s fossil fuel (oil, gas, coal, and electricity) subsidies decrease the consumer price index (CPI; Model 1) and, on the other hand, increase greenhouse gas emissions (GHGs; Model 2) from energy levels, using yearly data of five ASEAN countries from 2010 to 2021. The findings demonstrate that ASEAN’s fossil fuel subsidies for oil, gas, coal and electricity do not reduce the CPI and, therefore, cannot be interpreted as reducing inflation. In addition, there is no effect of gas and coal subsidies on GHGs. This might be due to the small average of the five ASEAN countries from 2010 to 2021 in terms of gas and coal subsidies. Following the expectation, oil subsidy, which is the highest amount on average (4,635.44 real 2021 million USD), has a strong positive effect on GHGs. However, electricity subsidy, which is the second highest amount on average (1,963.22 real 2021 million USD), has a significant negative effect on GHGs.

Classifying a state measure as state aid as an indispensable precondition for that measure’s compatibility assessment: Case C-40/23 P Commission v Netherlands

Classifying a state measure as state aid as an indispensable precondition for that measure’s compatibility assessment: Case C-40/23 P <i>Commission v Netherlands</i>

공공재정 부정이익환수제도에 관한 고찰

The Public Finance Recovery Act was enacted in April 2019 in addition to the disciplinary surcharge system for public officials under the National Public Officials Act and the Local Public Officials Act as subsidies, R&amp;D expenses, allowances, etc. of the state, local governments, and public organizations continue to make false claims and excessive claims. In order to prohibit public financial fraudulent claims and to recover the full amount of fraudulent income, which is unearned income, a sanction surcharge of up to five times is imposed and recovered in consideration of the intention and habitability of fraudulent claims. In this paper, after examining the concept, scope, and legal nature of public finance fraud recovery, we examine the Improper Payment lnfonnation Act of 2002, the False Claims Act, the Federal Improper Payments Coordination Act of 2015, and the Payment Integrity Information Act of 2019 in the United States, and the Subsidy Appropriation Act of Japan to seek implications for Korea In addition, we examine legal issues related to the systematization of pre- and post-systems to reduce fraudulent profits in public finance payments, securing the effectiveness of the whistleblowing system for public finance subsidy recovery, and activating the anonymous proxy reporting system, and suggest improvement measures to enhance the effectiveness of the Public Finance Recovery Act. Before recovering the illicit profits of public finance payments, relevant administrative agencies and public institutions should actively operate programs to strengthen the risk assessment and eligibility review of illicit payments, and after disbursing public finance support funds, they should strictly conduct an audit by an external auditor independent of the administrative agency and public institution to prevent illicit receipt of public finance support funds, and the results of the audit should be posted on the website of the relevant administrative agency to enhance transparency. In addition, in order to eradicate the negative organizational culture toward whistleblowers and the secret receipt of public finance support funds in Korea, whistleblowers should be allowed to file a U.S.-style qui tarn lawsuit only in cases where they make false claims to administrative agencies or public institutions. However, if the relevant administrative agency or public institution allows intervention in the lawsuit and recovers the illicit profits of public finance funds, they should be compensated 35% of the recovered amount to the whistleblower. Given the nature of fraudulent receipt of public financial support funds, the regional National Human Rights Commission's anonymous proxy reporting advisory group should be expanded in a balanced manner to ensure that the anonymous proxy reporting system is activated, and the anonymity of internal reporters should be guaranteed.

Branch differentiation of financial mechanisms of enterprise restructuring

In the paper, the financial mechanism of enterprise restructuring is interpreted as a complex process, the object of comprehensive analysis, clear planning, effective implementation, the implementation of which allows enterprises to restore financial stability, increase competitiveness and ensure sustainable development in the long term. It has been proven that the general principles of the functioning of the financial restructuring mechanism are: transparent business conduct, openness in communication, mutual benefit, reaching consensus, analysis of all aspects of activity, integration of various measures, realistic goals, financial flexibility, constant monitoring, reporting to stakeholders, innovativeness, proactivity , flexibility and operational adaptation, alternative, optimality, etc. Adherence to the specified principles ensures the successful implementation of financial restructuring, increases trust in the enterprise and contributes to achieving its financial stability. It is shown that the sectoral differentiation of financial mechanisms of enterprise restructuring allows taking into account the specifics of each industry, ensuring effective management of financial risks and optimization of resources. Successful restructuring requires an individual approach that takes into account the unique needs and operating conditions of each enterprise. Based on the results of summarizing the experience of the functioning of financial mechanisms in various branches of the national economy, it was established that they differ in various aspects of restructuring, which can be of the following nature: adaptive, structural, structural-adaptive, integrative, security-oriented, reengineering of business processes. General financial instruments that can be used in all branches of the national economy are substantiated - state financing programs through the use of state grants, subsidies and credit programs to support restructuring measures, as well as public-private partnerships based on the involvement of private investors for joint financing of infrastructure projects.

Bring Out Your Dead: A Review of the Cost Minimisation Approach in Health Technology Assessment Submissions to the Australian Pharmaceutical Benefits Advisory Committee.

Published literature has levied criticism against the cost-minimisation analysis (CMA) approach to economic evaluation over the past two decades, with multiple papers declaring its 'death'. However, since introducing the requirements for economic evaluations as part of health technology (HTA) decision-making in 1992, the cost-minimisation analysis (CMA) approach has been widely used to inform recommendations about the public subsidy of medicines in Australia. This research aimed to highlight the breadth of use of CMA in Australia and assess the influence of preconditions for the approach on subsidy recommendations METHODS: Relevant information was extracted from Public Summary Documents of Pharmaceutical Benefits Advisory Committee (PBAC) meetings in Australia considering submissions for the subsidy of medicines that included a CMA and were assessed between July 2005 and December 2022. A generalised linear model was used to explore the relationship between whether medicines were recommended and variables that reflected the primary preconditions for using CMA set out in the published PBAC Methodology Guidelines. Other control variables were selected through the Bolasso Method. Subgroup analysis was undertaken which replicated this modelling process. While the potential for inferior safety or efficacy reduced the likelihood of recommendation (p<0.01), the effect sizes suggest that the requirements for CMA were not requisite for recommendation. The Australian practice of CMA does not strictly align with the PBAC Methodology Guidelines and the theoretically appropriate application of CMA. However, within the confines of a deliberative HTA decision-making process that balances values and judgement with available evidence, this may be considered acceptable, particularly if stakeholders consider the current approach delivers sufficient clarity of process and enables patients to access medicines at an affordable cost.

The New EU Industrial Policy: Opening Up New Frontiers for Financial Capital

The EU has implemented a whole array of industrial policy programmes over the past decade to bolster the competitiveness of selected knowledge-intensive industries and to induce a digital and green transition. Responding to shifting competitive challenges in global capitalism, and the adoption of industrial strategies by other major economies, the new EU industrial policy seeks to onshore manufacturing capacity in sectors of geoeconomic importance, and simultaneously reduce dependencies on global value chains. Drawing on a historical materialist perspective, this article historizes and contextualises the financing strategies adopted within EU industrial policy. Faced with tight budgetary constraints, and deficit spending not being an option at the EU level, unlocking private investment takes centre stage, such as by tapping into capital markets or using member state aid or EU structural funds as a precursor, as well as by incentivising private investments through risk-absorbing financial instruments that rely on the EU budgetary resources. As will be shown, the EU has been experimenting with such risk-absorbing financial gimmicks for industrial policy purposes since the 1990s; yet, their usage has reached unprecedented levels with the heightened geoeconomic tensions since the 2008 and Covid-19 crises. The article demonstrates moreover that organised factions within financial and industrial capital have actively advocated for public safeguards, and that their deployment thus is not merely a functionalist response to shifting power dynamics or a desperate last resort in the absence of a supranational fiscal policy.

Legal and administrative elements of the construction of tax exemptions and allowances in the context of granting public support

Among the forms of public assistance of a passive nature are tax concessions and exemptions. A given form of aid can be of liquidity support, rescue and restructuring and pro-development nature for the enterprise. This form of assistance is reflected in the reduction of revenues to the state and local government budgets. Tax credits, used as investment incentives for entrepreneurs, can affect the growth of production, and in the case of new investments, the creation of new jobs or the retention of existing ones. The article presents the provisions of the tax law on real estate tax in correlation with the law on state aid, in the context of an assessment of - to what extent on the grounds of real estate tax it is possible to operate reliefs and exemptions that constitute state aid for entrepreneurs. The legal problems of providing state aid and the issues of tax procedures in the field of tax reliefs and exemptions and the calculation of the net value of state aid are presented.

Social Enterprise Under Moral Hazard: Who Gets State Subsidies and Active Financing?

Social Enterprise Under Moral Hazard: Who Gets State Subsidies and Active Financing?

State aid for broadband network deployment: National and subnational governance mechanisms, 2003–2023

This paper examines the governance models of State aid measures for broadband network deployment in European Union Member States. The research is based on 199 decision letters collected from the European Commission's competition cases database, published between 2003 and 2023. Deploying a theory-driven content analysis approach, the analysis reveals and categorises a variety of governance models. These models vary regarding the authority responsible for the decision-making and, in the case of national schemes, the authority responsible for the implementation, including centralised and decentralised arrangements. Different legacies and institutional set-ups explain the governance models, including the typology of state structures, the constitutional powers, the traditions of participation in the telecommunication sector, policy diffusion and regional development. There are several possible pathways to a gradual transition from one model to another. The design of flexible national schemes, which offer subnational authorities the option to implement them in their regions or to rely on central management agencies for specific tasks adapted to their interests, resources and capacities, could be the optimal solution to prevent the launch of ad hoc measures by subnational authorities and to adapt to different institutional arrangements.

On fraud and certification of green production

AbstractWe present a novel model of fraud and certification in green production. We focus on settings where firms decide between a green or a standard version of a product together with an advertising strategy that can include fraud. In addition, green firms can choose to certify their production to guarantee the truthfulness of their claims. This results in four production‐advertising possibilities (standard, genuine green, fraudulent green, and certified green), by which we provide new insights about the prevalence of fraud and certification. We characterize the perfect Bayesian equilibrium of the resulting game for given green production costs, certification costs, and consumers' willingness to pay for standard production, and we perform comparative statics for the main parameters of the resulting game. We find that changes in certification and green production costs affect consumers' beliefs differently, whereby increases in certification and decreases in green production costs can broaden the likelihood of fraud. These novel results are robust to different market structures and question the general desirability of public subsidies for promoting green production without accompanying certification.

Paying for School Finance Reforms: How States Raise Revenues to Fund Increases in Elementary-Secondary Education Expenditures

This study investigates how individual states raise revenue to pay for elementary-secondary education spending following school finance reforms (SFRs). We identify states that increased and sustained education expenditures after reform, search for legislative statutes that appropriated more education spending, and assess how policymakers funded the SFRs. Our results show that state legislatures increase investments in education by increasing tax revenue streams, such as sales and excise taxes, and by taking over property tax collections. Considering these results, we discuss that increased state investment in education should be accompanied by a policy mechanism to distribute state aid equitably to districts. Moreover, policymakers should consider local voters’ preferences when implementing SFR policies, as tax increases may reduce local fiscal effort for education.

Comfort, or not comfort, that is the question. The legal status and consequences of comfort letters issued by the European Commission in State aid cases

ABSTRACT The paper discusses issues not touched upon in legal literature, namely the legal status and consequences of comfort letters issued by the European Commission in State aid cases. The European Commission has exclusive competence to examine the compliance of support provided by Member States to domestic undertakings with State aid rules. Under EU law, the Commission's final position on the State aid character of the assessed measure must take the form of a decision. However, sometimes, the proceedings are concluded not by a decision but by a comfort letter. It presents the final position of the European Commission and, in many cases, ends the procedure. However, the legal character of the Commission's comfort letters may raise doubts. The article explains the concept of comfort letters issued in State aid cases, their legal status, and the consequences they bring to interested parties.

On the effects of public subsidies for severe and mild dependency on long-term care insurance

Extant theoretical work on long-term care (LTC) and its insurance has neglected an important fact: Benefits of LTC insurance as well as the amount of public subsidization of LTC can differ between severe and mild dependency. The objective of this paper is to revisit the study of optimal purchase of LTC insurance and its crowding out by public subsidies dissociating coverage for the risk of dependency in nursing home and of dependency at home. This study examines three prevalent models of LTC insurance indemnities commonly encountered in various LTC insurance markets. It also studies the presence of potential intergenerational moral hazard and shows how it drives the crowding out or crowding in of LTC insurance by public subsidization according to the insurance models and risk aversion behaviours.

Estimating the loss-reduction effects of disaster preparedness and mitigation: An empirical study of US coastal states.

As extreme weather events like floods and storms continue to increase, it is crucial to examine the degree to which various disaster preparedness and mitigation investments can lower these risks. In this research, we empirically examine the effects of multiple federal disaster aid programs on reducing subsequent flood- and storm-related damages across US coastal states. Our analysis distinguishes aid programs and their funded projects targeting different emergency management functions, including preparedness, nonstructural and structural mitigation, emergency response and protective measures, and rehabilitation of public infrastructure. We construct panel data of more than 1800 US counties over the years 2000-2019 and estimate a fixed-effects model with time-varying county-level socioeconomic and demographic characteristics. We find that disaster aid generally helps mitigate property damages, although this loss-reduction effect varies by program. Among all aid programs, the Emergency Management Performance Grant results in the largest reduction of future flood damages. The Public Assistance grants supporting emergency work are also found to exert a strong effect on risk reduction. We also find that the impacts of disaster aid are higher in coastal counties. Our study is one of the first few examining the resilience implication of disaster aid in coastal counties, and our results underscore the importance of investing in capacity building, contingency planning, and consistency in maintenance.

How altruism works during a pandemic: Examining the roles of financial support and degrees of individual altruism on international remittance

AbstractWhile the importance of international remittances has been recognised globally, understanding how public subsidies and the degree of individual altruism affect remittance behaviour remains limited. Although international remittances were predicted to decline drastically in the early stages of the COVID‐19 pandemic, remittance data proved that they were ultimately resilient to the anticipated negative shock of 2020. Potential reasons include altruistic motivations among migrants and economic stimulus programmes in large economies; however, a detailed investigation from a micro‐perspective is lacking and urgently needed. This study examines the impact of financial support in host and home countries and individual altruism on international remittances using unique data from foreign care workers in Japan. Our panel data estimation shows that emergency cash transfers from the host country positively affected migrant remittance amounts; however, no crowding‐out effects were observed due to subsidies from home governments. The heterogeneous analysis also reveals that highly altruistic remitters were more likely to send money home after receiving cash transfers in the host country. The results support the claims of international organisations that the resilience of remittances was supported by altruism and public financial support during the pandemic.