Structure Of Public Expenditure Research Articles

How does tax revenue sharing affect local government governance? Empirical evidence from Chinese cities

High-level government governance is the support and guarantee for achieving high-quality economic and social development. This study identifies the impact and mechanisms of tax revenue sharing on local government governance from theoretical and empirical perspectives. It is found that the increase of tax sharing ratio of city and county governments can trigger financial incentives and effectively improve the level of local government governance. At the same time, the increase of tax sharing ratio can also improve the public expenditure structure of local governments to enhance the level of local digital infrastructure construction so as to strengthen governance efficiency.

Economic Globalization, Taxation and Public Expenditures: Evidence From OECD Countries

Globalization shapes the fiscal policies of countries, leading to changes in the structure of taxation and public expenditures. According to the theory of international tax competition, as globalization increases, countries use their tax policies to attract more mobile factors, resulting in tax competition. This competition causes capital tax rates to decrease and labor tax rates to increase, which is known as the efficiency effect of globalization. On the other hand, governments expand the welfare state to compensate for the increased economic risks resulting from globalization. This is known as the compensation effect of globalization. The purpose of this paper is to empirically test these hypotheses using a dataset of 26 OECD countries from the period 1990-2020. The study employed the Driscoll-Kraay estimator, which produces reliable estimates with robust standard errors in the presence of heteroscedasticity, autocorrelation, and cross-sectional dependency issues. The results indicate that economic globalization has a negative effect on corporate tax rates and a positive effect on labour tax rates. Additionally, it was observed that a high level of social spending is linked to an increase in economic globalization. These results emphasise that the efficiency effect and the compensation effect coexist and complement each other rather than being rivals.
 Key words: Globalization, tax competition, public expenditure, panel data 
 JEL Classification: E15, E62, C23

The interdependencies between the private and public sectors in open economies

Empirical evidence shows that countries with larger public sectors also have larger trade shares and a larger share of firms that export. These links between the public and the private sector are reconciled in an analytically tractable general equilibrium model allowing for a two-way causal relation between size (and the composition) of the public sector and openness and industry structure of the private sector. First, a larger public sector or a larger share of public expenditure used for public employment (alternative to transfers) results in a more open private sector (trade share and fraction of firms exporting), and it is also associated with more fat-tailedness of the firm size distribution, higher average productivity, lower average unit labour costs, and better wage competitiveness and terms of trade. These outcomes are driven by endogenous entry and selection of firms. Second, for optimal fiscal policies, international spillovers imply that non-cooperative policies have an upward bias in the overall size of the public sector, but a downward bias in transfers as a share of public expenditures. Trade liberalization and the degree of firm heterogeneity magnify these biases and thereby influence the size and structure of public expenditures.

Expenditures on Pensions and Benefits in State Budget of Russian Empire in 19th to Early 20th Century

The article deals with the issue of the place of expenditures for the payment of pensions and benefits in the structure of public expenditures of the Russian Empire. It is shown that the amount of expenditures on pensions in absolute terms constantly increased (from 1741 to 1913 by more than 13 times). Since the amount of pensions paid, determined by the Pension statute of 1827, remained unchanged until 1917, this growth was determined by a constant increase in the number of pension recipients. This increase was due to an increase in the number of civil servants. At the same time, the share of expenditures on pensions and benefits in the expenditure part of the budget of the Russian Empire (“ordinary expenses”) fluctuated, reaching a maximum (5.1%) in 1871 and a minimum (2.3%) in 1903-1904. These fluctuations were determined by changes in the amount of the expenditure part of the empire’s budget, which increased noticeably by the beginning of the 20th century. On the whole, expenditures on pension provision accounted for a significant part of budget expenditures, exceeding such significant expenditure items as, for example, the expenditures of the Ministry of Public Education or the Ministry of State Property (Ministry of Agriculture and State Property, Main Directorate of Land Management and Agriculture), although they were inferior to the expenditures of the Military Department. The insufficiency of the size of pensions, due to their invariability, was combined with the burdensomeness of pension expenditures for the state, but a radical reform of the pension system did not take place.

Spatial Human Development Index in China: Measurement and Interpretation Based on Bayesian Estimation

The development of urban agglomerations dominated by the service industry is an important driving force for further sustainable economic growth of China. Spatial analysis marked by population density and regional integration is an essential perspective for studying the human development index (HDI) in China. Based on Bayesian estimation, this paper examines the influence of a spatial factor on HDI by using a spatial hierarchical factor model within the framework of Sen Capability Approach theory, overcoming the neglect of spatial factors and their equal weight in traditional measurement of HDI. On this basis, the HDI including the spatial factor was measured based on the panel data from 2000 to 2018. The results reveal that (1) provinces with high population densities and regional integration have higher rankings and low uncertainties of HDI, which can be attributed to the improvement of education weights; (2) HDI has a certain spatial spillover effect, and the spatial association increases year by year; (3) robust test by using nighttime lighting as an alternative indicator of GDP supports that the spatial correlation is positively related to HDI ranking. The policy recommendations of this paper are to remove the obstacles for cross-regional population mobility and adjust the direction and structure of public expenditure.

Ways of Reforming the System of Public Finance in Poland as an Implication of the Effects of the Covid-19 Epidemic. Financial and Economic Approach

Public finance management has a very global nature. Here decisions are made that determine everything related to collecting and allocating public means. However, the public finance system need to realize that this level is also highly entangled politically, with political transformations accompanying changes of governments and cooperating party coalitions. This accounts for the fact that some general recommendations are formed, specifying the ways of managing public means. The aim of the article is to identify ways to rationalize the reform of the public finance system in Poland. Induction was used as the main research method. It consists in drawing general conclusions or establishing regularities based on the analysis of empirically established phenomena and processes. The results of the presented content are proposals to optimize financing and management of the public sector in Poland. The main conclusion from the analyzes carried out assumes that the structure of public expenditure in Poland is characterized with high share of expenditure on social care, especially on allowances related to gaining and allowances for the family of a deceased person. Relatively high public expenditure is also allocated to education, mostly on higher education, and national defense. At the other end of the scale, categories which receive relatively little financing in Poland include: healthcare, with particularly low level of investment expenditure, and general state activity (public administration and interests on public debt).

International Comparison of Scientific and Technological Innovation -Input and Output

Strengthening the country with science and technology is a new strategy for China's economic development. However, lack of core technology in many fields limits the development of China's innovation. This paper collects and analyzes the data on the input and output of scientific and technological innovation in China, the United States, Japan and other major countries, then puts forward suggestions on how to improve the structure of public financial expenditure on science and technology, how to obtain scientific and technological funds through multiple channels, and how to adjust the structure of personnel engaged in R&D activities.

Residents’ Budget Preference, Private Willingness to Pay, and Budget Resource Allocation Satisfaction Based on the Analysis of the Survey Data of J City

As finance is the foundation and important pillar of the national governance system, the participation of residents in the core budget process is vital. Accurately revealing the resident budget preferences is the logical starting point for residents to participate in the budget. Based on more than 1500 resident surveys in City J, the work used the contingent valuation method to measure resident budget preferences. On this basis, the relationship between population heterogeneity and budget preference was analyzed by seemingly unrelated regressions. It was found that the structure of resident budget preferences is consistent with the structure of public expenditure. Residents believed that among budget categories, the expenditures on education, social security, and employment are the highest, and the expenditures on commercial services and finance are the lowest. Attention should be paid to the voice that may be ignored during the allocation of budget funds through the revelation and aggregation of residents’ preferences as the entry point for the aggregation of financial consensus. Besides, the threshold for citizens’ budget participation can be reduced by integrating program budget concepts and deepening the fiscal-expenditure classification reform.

Fundusz Medyczny w sektorze finansów publicznych

The aim of this study is to determine the legal status of the Medical Fund as a state special-purpose fund, the sources of its financing and the rules of the disposal of public funds, as well as its place in the public finance sector. The article uses the formal-legal method, applicable to legal scholarship. The introduction to the Polish public finance sector of a new unit responsible for financing health care seems to be an expression of the legislator’s care for this sector of activity of public authorities. However, the introduction of the Medical Fund as an additional resource did not significantly increase the financial outlays for the implementation of public tasks in the area of health care incurred by the state and local government units. There was only a change in the structure of public expenditure in the health sector.

The Role of State Policy in the Formation of Food Security in the Countries of the European Union

Abstract. Introduction. The correlation between inflation and unemployment is a very relevant topic for both Ukraine and other countries. The connection between them is so strong that they are like a natural disaster with severe socio-economic consequences directly for the population of the countries on whose territory these processes are taking place. The level of food supply in modern conditions is one of the priority areas of state policy in the vast majority of countries in the world. The categorical apparatus of the sphere of food supply was formed in the 70s of the 20th century, when the problem of hunger acquired special importance for most countries of the world. The main priorities in this field at that time were quantitative satisfaction with food products and their financial availability for each person. And although almost half a century has passed since that time, this question has not only not lost its relevance today, but has also become one of the most important and priority ones. Purpose. The aim of this study is to thoroughly analyze the current trends of inflation in the countries of the European Union and the impact of these factors on the level of unemployment and the sustainable development of agro-food production as a component of food security in the region. Results. The results of empirical and regression analysis have shown that there is a direct causal relationship between inflation and unemployment, with inflation being the cause and unemployment being the effect. This made it possible to assert that the maintenance of macroeconomic stability in the EU countries should, first of all, consist in ensuring stable prices and a stable exchange rate. Maintaining the stability of the country's economic condition will prevent violations of the system of sustainable development of enterprises and contribute to the strengthening of food security trends. Conclusions. Inflation and unemployment threaten the economy of any country. However, as a rule, the most vulnerable strata of the population suffer, which affects food security. The relationship between inflation and unemployment exists and is legally regulated by the state administration. As practice shows, modern analytical software tools are used in various states, which are based on macro-, regional, and micro-level statistical data for modeling socio-economic situations, which helps to make the most realistic forecasts of the economic situation. In the future, it will be expedient for the EU government to set the following key tasks: first, use the entire arsenal of measures aimed at further suppressing inflationary factors; secondly, optimization of the nature and structure of public expenditures, while not abandoning the state's duties to protect socially vulnerable segments of the population, which is necessary for successful state regulation of food security processes; to establish the mechanisms and algorithm for achieving national food security, which will include scientific support, the formation of a regulatory and legal framework, increasing production volumes and increasing food security.

The Impact of Public Spending (Expenditures) on Economic Growth in Iraq for the Period 2004-2019

Although public expenditures are a tool used by the state to manage public revenues and satisfy public needs, they are one of the most important tools of the country's financial policy, through which the state intervenes in economic and social life and translates the objectives of economic policy into real projects and programs of work. It is possible to assess the performance of the government by studying and analyzing the development and structure of the general budget, and despite the high volume of public expenditures in Iraq during the research period, the state was not able to achieve the economic and social goals represented by achieving high rates of growth and economic and social balance, as there was an imbalance In the structure of public expenditures, and this leads to an imbalance in the public budget, which reinforced its deepening, which is also reflected in the imbalance in the economic structure of the country.

Обліковий аспект управління державними фінансами у сфері науки

The article is devoted to the study of key approaches to the creation of a modern mechanism of public finance management in the field of science in Ukraine on the basis of accounting information about the real cost of research and development. The state of financing the sphere of science is analyzed, and negative trends are shown in the structure of public expenditures that do not contribute to the development of the scientific potential of our state. It has been determined that financing of subjects of scientific - technical activities should be carried out on the basis of a reliably determined cost of public services provided by them. It has been substantiated that the cost price as an indicator of the volumes, directions and quality of the use of budgetary funds should become the basis for determining the amount of government funding and establishing a contractual price for research and development. It has been shown that in the conditions of the declared European integration direction of the development of domestic science, Ukrainian subjects of scientific and scientific-technical activities function in the absence of a sectoral normative legal act on the formation of the cost price of scientific research and scientific-technical (experimental) developments. It is shown that in order to implement state policy to enhance domestic scientific and scientific -technical activities and integration into the European Research Area, it is necessary to agree on approaches to mechanisms for the distribution of budgetary funding and develop a unified regulatory framework for planning, accounting for research and development and calculating thе cost price. This will contribute to the formation of unified principles for determining the cost of scientific re and scientific - technical (experimental) developments to create a modern effective mechanism for managing public finances in the field of science.

FISCAL ADJUSTMENT: ASSESSING THE SUCCESS AND IMPACT IN CASE OF PAKISTAN

This study intends to evaluate the effectiveness of fiscal reforms in lowering the national debt and their effects on Pakistan's economic growth. Findings from such an investigation of the composition of fiscal adjustment show that while spending-based consolidation significantly lowers the debt-to-GDP ratio, it has a contractionary effect on the economy as a whole. This brings to light an important feature of Pakistan's public expenditure structure: while adopting austerity measures, the government prefers to reduce capital spending on items that are less politically contentious. Additional findings showed that, despite playing a significant role in producing an expansionary effect, modifications to current spending do not successfully reduce public debt. Even though descriptive analyses cannot prove a cause-and-effect relationship, success seems to be impacted by tax-side adjustments. Similar to this, the structure of direct and indirect taxes also raises the possibility of fiscal adjustment success. According to the analysis, the composition of direct taxes has minimal bearing on both the success and impacts. To minimize adverse effects, the government should rely on spending-based adjustments. In addition, altering the ratio of government spending in favor of capital investment is probably going to spur economic growth and help the nation meet its MDGs. Keywords: Fiscal Adjustment; Success; Impact; Public Debt; GDP Growth; Millennium Development Goals

The effect of female representation on political budget cycle and public expenditure: Evidence from Italian municipalities

AbstractThis study analyzes the impact of the gender composition of political institutions on the political budget cycle (PBC) and on the size and structure of public expenditure. An instrumental variable approach is implemented to evaluate the influence of female politicians in municipal councils. The introduction of gender quotas for Italian municipalities is used as an exogenous variation in female participation in politics. The results show that: (i) fluctuations in local public spending are only slightly affected by the presence of a wider female representation; (ii) an increase in the number of elected women reduces the overall amount of public expenditure; (iii) this reduction involves fields typically affected by PBC (e.g., roads' maintenance) except those related to females' needs (e.g., kindergarten, primary education, and social care).

Impacts of public spending on economic growth in Dong Thap province

The study examines the effect of public spending from many perspectives on economic growth and vice versa in Dong Thap province. The Granger causality theory and the VAR autoregressive vector model of real GDP (GDPR) were used to test the causal relationship between public spending and provincial economic growth. Time series data from 1995 to 2020 were collected from Dong Thap Provincial Statistics Office. The research results show that: aggregate public expenditure has no Granger relationship with GRDP but is significant in the opposite direction; GRDP has a positive effect on overall public spending - economic growth increases the scale of public spending; development investment spending has no Granger relationship with GRDP but recurrent spending has a positive effect on GRDP. However, in the opposite direction, GRDP does not have a Granger relationship with recurrent expenditure but has a Granger relationship with development investment spending. The study also found that private investment and growth in labor size have a positive effect on GRDP. The author has proposed a number of significant solution groups based on the investigation’s findings. The first solution is to allocate budget resources so that the recurrent expenditure proportion can account for an increasing proportion in the structure of public expenditure. The second option is to create an environment that encourages private investment. For instance, perfecting mechanisms and policies on attracting private investment; socializing, attracting, and establishing favorable conditions for the private sector to participate in the delivery of public services; encouraging and assisting the private sector to make investments in cutting-edge research, development, and technology transfer. The third option is to put more of an emphasis on human resource development, with a particular emphasis on educating top-notch human resources to meet the province's development needs. In the upcoming years, boosting training and labor support services through procedures and policies as well as financial support from the budget will also have a significant positive impact on output volume.

Study on the Relationship of Grassroots Corruption and Government Expenditure Based On Panel Data

The study found that the level of grassroots corruption and the scale of government spending was positively correlated, that is, the higher the level of grassroots corruption, the greater the size of government spending. What’s more, grassroots corruption will affect the government’s public expenditure structure, significantly increased the expenditure on science and technology, education, urban and rural community affairs, reducing the expenditure on national defense and health care. Therefore, suggest intensifying anti-corruption efforts and standardizing government approval flow. Strengthen the institutionalization of corruption and administrative accountability, to build a full range of social supervision system, so as to optimize the Structure of public expenditure, improve the use and allocation of public resources.

THE CRISIS IN THE HIGHER EDUCATION SYSTEM OF CONTEMPORARY UKRAINE IN THE CONTEXT OF NATIONAL SECURITY CHALLENGES

The article analyzes the state of the art in the Ukrainian higher education system and education reform during the post-Maidan period. Political, economic factors of university reform are examined in detail for an insight into the transformations over the last years. Special attention is paid to the close correlation between the institutional dynamics of higher education and political factors – the ideology of reform and the government policy in higher education, the political line-up in the parliament and MPs’ views on education and research. The author finds that modernization in higher education during this period was largely correlated with the dynamics of the political transformation of the government.
 Two periods in university policy are singled out: the reform period (from mid-2014 to mid-2016) and the stabilization period (2016–2019). The author elicits that the current crisis in the Ukrainian higher education system is caused by the attempt to implement neoliberal approaches toward university policy, while failing to address and even exacerbating unresolved post-Soviet problems. The decline in the quality of higher education has a negative impact on Ukraine's economic competitiveness, the reproduction of the nation's intellectual resources and human capital, as well as social cohesion. It may also trigger new humanitarian security challenges.
 In the second part of the article, the author focuses on the macroeconomic conditions for the development of higher education in 2014–2019, the dynamics of public funding and the structure of education expenditures. The analysis finds that during this period, the share of higher education expenditures in the structure of total public expenditures also decreased, and the rationale of the government was motivated by neoliberal approaches.
 Particular attention is paid to the analysis of science and research funding in Ukraine. Currently, academic research is in deep crisis, and the system of public funding of Research and Development is inefficient. University research remains underfunded, which results in the further deterioration of the already low research and innovation capacity of national universities. The level of public funding for science in 2014–2019 was the lowest in twenty years and amounted to 0.2–0.25 % of GDP, which did not cover even the minimum needs of the industry. The critical state of affairs in science and research is potentially a national security challenge, as it undermines opportunities for the technological modernization of the national economy, the development of innovative industries, and contributes to the leaking of intellectual resources from Ukraine.

The Relationship between the Structure of Tax Revenues and the Structure of Public Expenditure in the Member States of the European Union

Purpose: The primary goal of the paper is to identify the relationship between the structure of tax revenues and the structure of public expenditure in the EU-28. Design/Methodology/Approach: Linear regression was used to estimate the correlation between the share of indirect and direct tax revenues in total tax revenues and the share of expenditure for specific purposes in total public expenditure in the EU-28. Then, using the sign of the slope as the criterion, the EU-28 was classified by dividing the set into countries with a positive dependence (+), for which the lower and upper bound of the confidence interval of the slope are positive, and countries with a negative dependence (-), for which both the lower and upper bound of the confidence interval is negative. Countries classified as positive or negative are also countries for which the F test confirmed the linear dependence. Findings: Based on the conducted research, it was found that the relations between the structure of tax revenues and the structure of public expenditure varied in the EU Member States in the years 2004-2019. Very strong or strong correlations between the share of a given tax group in total tax revenues and the share of specific expenditure in total public expenditure were observed only in relation to indirect taxes. In the case of direct taxes, no such relations were observed. Practical Implications: The results of the research are important from the point of view of the implementation of fiscal policy in the EU Member States, including the need to shape tax systems that not only provide revenues necessary to cover public expenditure, but also take into account tax fairness. Originality/value: The research adds value to the knowledge of contemporary tax systems, in particular to their redistributive function in relation to tax fairness.

Expenditures on National Projects in the Public Spending System

The paper is devoted to analyzing the category of “public expenditure”, its comparative analysis with the category “budget expenditures” in doctrinal understanding and according to the legislative definition. On the basis of relative and absolute data, the author highlights the trend towards an increase of the share of national projects in the overall structure of public expenditure, as well as the trend towards annual increases in direct expenditures from the federal budget. The author concludes that it is necessary to consolidate the thesis on priority financing of national projects in the allocation of budgetary funds at the federal law level. The author analizes the place of allocations for the implementation of national projects in the updated Budget Classification and determines a number of features of budget financing of national projects. The paper elucidates the legal mechanisms of adjustment of national projects financing on the basis of the legislation, highlights the modernization of financial instruments in the field of public procurement, trends in the field of distribution of the inter-budgetary transfers with co-financing. The author highlights the importance of retrospective analysis of information on the performance of budgetary allocations by the key spending units of federal budget funds in the previous fiscal year for the purpose of prospective planning. The conclusion is made about facilitating the integration of the format of national projects into the system of strategic planning with the medium and long-term perspective.

The impact of budget deficit, public debt and education expenditures on economic growth in Poland

AbstractThis paper investigates the relationship between economic growth in Poland and a few metrics of fiscal policy: budget deficit relative to GDP, the structure of public debt, education expenditures, and public consumption. We prove that with constant values of parameters of fiscal policy, over time the economy converges to the balanced growth path which is unique and globally asymptotically stable.Having calibrated the model with statistical data, we demonstrate that in the period of 2000–2016 economic growth in Poland was driven primarily by rapid improvement in the level of human capital (at a rate of 5.4% per annum), and secondarily due to the accumulation of capital (2.7% annually). If recent trends in fiscal policy are continued, the Polish economy will converge to the balanced growth path with GDP growing at 3.7%. This rate may be boosted, if fiscal policy is appropriately adjusted, for example by permanent reduction in budget deficit. We also analyse the effects of changes in the financing structure of public debt. Finally, we present several scenarios of increasing public and private spending on education.