Types Of Government Expenditure Research Articles

Does Increasing Public Service Expenditure Slow the Long-Term Economic Growth Rate?—Evidence from China

Economic downturns have increased in recent years, and the impact of COVID-19 has slowed economic growth. The market’s overall pessimism led to a contraction in the government’s fiscal revenue. The Chinese economy has always relied on government investments. Local governments’ productive investments have directly contributed to capital formation, which has promoted rapid economic growth. With the increase in expenditure pressure and the tightening of income caliber, will the continuous growth of the proportion of public service expenditure affect the established growth goals and hinder the efficiency of economic growth? This study explains this based on a general equilibrium model containing two types of government expenditure and uses China’s 2010–2019 provincial panel data for the empirical analysis. The results show that, in the current economic situation, increasing the proportion of public service expenditure is conducive to further economic growth.

The Effect of Government Expenditure on Human Capital in the Czech Republic

In current thinking, human capital is referred to as a driver of national economies. It encompasses all of the knowledge, talents, skills, abilities, experience, intelligence, and training of a country's workforce. National governments are fully aware of this, and they are seeking to stimulate human capital and encourage its development. A number of studies have shown that public investment for developing human capital is claimed to be the highest performing investment for achieving better economic performance. The aim of this paper is to verify whether government investment in areas that develop human capital can indeed aid its development in the Czech Republic. Using the least squares method, the paper studies whether the Human Development Index showed correlation to individual types of government expenditure between 1995 and 2017. The analysis revealed that in the Czech Republic, spending on recreation, culture, and religion had the largest influence on developing human capital for the period under review. Expenditure on education and health, which most studies cite as the main tools for cultivating human capital, placed only third or fourth regarding their contribution to developing human capital.

THE EFFECT OF GOVERNMENT EXPENDITURE ON INCOME INEQUALITY AND POVERTY IN INDONESIA

Income inequality and poverty have become key issues in development studies since the 1970s. Although theoretically there are various factors associated with the incidence of poverty and income inequality, choices regarding the types and structure of government expenditure are often quoted as one of the crucial determinants. However, the evidence is still inconclusive, and the research about these issues in the case of Indonesia is still minimum. This paper tries to contribute to the discussion by analysing a panel data set of 33 provinces from 2005 to 2017 to examine the effect of different types of government expenditure on income inequality and poverty in Indonesia. Using the fixed effect, random effect, and Seemingly Unrelated Regression (SURE) system, this paper finds that social aid, subsidy and grant expenditure have an insignificant effect on reducing income inequality and poverty in Indonesia. However, the empirical evidence suggests that infrastructure spending has a negative correlation with income inequality in urban areas (when using the random effect model), and rural areas (when using the fixed effect model). In addition, infrastructure expenditure is also negatively and significantly correlated with poverty in Indonesia, and the impact is more significant in rural than urban areas.

The Impact of Government Expenditure on GDP in the State of Qatar: A Nonlinear ARDL Approach

This study investigates the long run relationship between government expenditure and the GDP in the State of Qatar with a focus on the non-mining and quarrying GDP during the period 1980-2017 using the nonlinear autoregressive distributed lag (NARDL) model. The NARDL model results show an asymmetric impact of government expenditure fluctuations as the increase in both government current and capital expenditures leads to a positive and significant effect on the Qatari's non-mining GDP, whereas the decrease in both types of government expenditure does not significantly affect the non-mining and quarrying GDP. This leads us to conclude that the non-mining and quarrying GDP is unresponsive to government budget cuts. The previous result should encourage policymakers to make bold budget cut decisions, when needed, without being afraid of the potential negative effects on non-mining and quarrying GDP.

Revisiting the Effect of Supermajority Requirements on Fiscal Outcomes

I use matching methods on a panel of U.S. states over the period 1960 -- 2008 to test whether the adoption of a supermajority requirement impacts state-level expenditures and tax revenue. I find evidence that the growth rate of welfare expenditures per capita is lower five year after adoption of a supermajority requirement, but that this reduction is not sustained over a longer horizon. I also find little evidence that a supermajority requirement has a robust effect on other types of expenditures or tax revenue. These results support existing evidence showing that a supermajority requirement can reduce redistributive spending, but conflict with evidence showing that supermajority requirements affect tax revenue and other types of government expenditures.

The Effects of Government Spending Over the Business Cycle: A Disaggregated Analysis for OECD and Non-OECD Countries

Using a panel of OECD and non-OECD economies, we estimate the effects of three types of government expenditure (compensation of government employees, government use of goods and services and government investment) and social benefits on output, private consumption and investment. In OECD economies, we find that compensation of government employees and government investment generate significantly positive multipliers, whereas government use of goods and services does not. However, only the multipliers of compensation of government employees are found higher during recessions and only for horizons of up to two years ahead. In non-OECD economies, the multipliers of compensation of government employees and government investment are positive but smaller than those for the OECD group and they do not tend to differ in recessions and in expansions. We also provide evidence that social benefits generate increases of private consumption, for both OECD and non-OECD countries.

The Effect of Government Debt on Indonesia's Economics Growth

The current development in Indonesia had changed the structure of the budget, because an increased in government expenditure had caused budget deficits. One of solutions to overcome budget deficit is debt. During the period 2014-2017 the government debt profil had an average growth of 13%, which was higher than the average of economic growth. This study aims to analyze the effects of government debt on the Gross Domestic Product (GDP) via three types of government expenditure during the period of 1981-2017. The method used in this research was Two Stage Least Square with the simultaneous regression. The result show that government debt had significant effect on capital and regional expenditure, but did not significantly influence employee expenditure. Meanwhile, the capital and regional expenditure had significant effects on GDP. The highest multiplier effect affecting GDP was regional expenditure.

Revisiting the Wagner’s law for Indian States using second generation panel cointegration

In this paper, we examine if the Wagner’s law, that indicates a long-run economic relationship between government expenditure and income, holds across 15 non-special category states of India post the 1991 liberalization era. In particular, we study the non-stationarity and cointegration properties between state-level government expenditure and state-level income. Given the presence of cross-sectional dependence in our data, we adopt the second-generation panel unit root and cointegration tests. Using panel estimation methods, our results indicate that the Wagner’s law holds at an all-India level with respect to all categories of government expenditure i.e. aggregate government expenditure, development expenditure and non-development expenditure. States with above-average income mostly exhibit long-run elasticity less than one across all types of government expenditure while states with below-average income level exhibit long-run elasticity greater than one across all categories of government expenditure.

Framing the issue of ageing and health care spending in Canada, the United Kingdom and the United States

Political debates about the affordability of health care programmes in high-income countries often point to population ageing as a threat to sustainability. Debates in the United States, in particular, highlight concerns about intergenerational equity, whereby spending on older people is perceived as a threat to spending on the young. This paper compares how the problem of health spending is defined in Canada, the United Kingdom and the United States by presenting the results of a content analysis of print media during the period 2005-2010. We found that population ageing was cited as an important source of health care cost increases in all three countries but was cited less frequently in Canadian newspapers than in the UK or US papers. Direct claims about intergenerational equity are infrequent among the articles we coded, but newspaper articles in the United States were more likely than those in Canada and the United Kingdom to claim that of high health care spending on older people takes resources away from younger people. In Canada a much larger percentage of articles in our sample either claimed that high health care spending is crowding out other types of government expenditure. Finally, we found that almost no articles in the United States challenged the view that population ageing causes health care spending, whereas in both Canada and the United Kingdom a small, but steady stream of articles challenged the idea that population ageing is to blame for health care spending increases.

Economic Growth and Government Spending in Saudi Arabia: an Empirical Investigation

This paper empirically examines the effects of different types of government expenditures, on economic growth in Saudi Arabia. We use different econometric techniques to estimate the short- and long-run effects of these expenditures on growth and employ annual data over the period 1969-2010. Our findings indicate that while private domestic and public investments, as well as healthcare expenditure, stimulate growth in the long-run, openness to trade and spending in the housing sector can also boost short-run production. These findings draw some policy implications for Saudi policymakers on maximizing the returns of the government spending on economic growth.

Making Every Dollar Count: Local Government Expenditures and Welfare

The paper aims at examining the relationship between the allocations of funds at the local government level and the economic well-being of citizens. The results of this study help shed light on ways to get the best out of every dollar spent by local governments. Three empirical proxy measures for citizen well-being were used in the estimation of three different panel data models. Results suggest that some types of government expenditure can have a positive influence on citizen well-being. The analysis provides insights into how economic development policies may be conceived by local governments to ensure sustained economic prosperity of its citizens.

Economic Growth and Government Spending in Saudi Arabia: An Empirical Investigation

This paper empirically examines the effects of different types of government expenditures, on economic growth in Saudi Arabia. We use different econometric techniques to estimate the short- and long-run effects of these expenditures on growth and employ annual data over the period 1969-2010. Our findings indicate that while private domestic and public investments, as well as healthcare expenditure, stimulate growth in the long-run, openness to trade and spending in the housing sector can also boost short-run production. These findings draw some policy implications for Saudi policymakers on maximizing the returns of the government spending on economic growth.

Local Government Spending Multipliers and Financial Distress: Evidence from Japanese Prefectures

We estimate local government spending multipliers using annual data for 47 Japanese prefectures during the 1990s. Our main findings are as follows: the average local government spending multiplier is positive and significantly different from zero but not larger than one; there are large and significant differences in the output effects of different types of government expenditures: transfers to firms have the highest multiplier, significantly larger than one, while transfers to households have the lowest multiplier, significantly below zero; firms' financial distress has a significant negative effect on the local government spending multiplier, in contrast to economic slack that has a significant positive effect.

TESTING THE VALIDITY OF WAGNER'S LAW IN BOLIVIA: A COINTEGRATION AND CAUSALITY ANALYSIS WITH DISAGGREGATED DATA

Nine versions of Wagner’s law are examined employing annual time-series data on Bolivia for the period 1940-2010. The analysis is an advance over previous work in several ways. First, the stationarity properties and the order of integration of the data are investigated using the Augmented Dickey-Fuller and the Phillips and Perron tests. Second, the hypothesis of a long-run relationship between different types of government expenditures and income is tested employing the methodology of cointegration analysis. Third, Error Correction Models are utilized to determine the direction of causality between the variables of interest. Lastly, the study comprises a period of seventy years, the longest of its kind for Bolivia. Consistent with Wagner’s proposition, bidirectional causality is found between income and government expenditures in six of the nine versions of the law.

THE INFLUENCE OF DIFFERENT FORMS OF GOVERNMENT SPENDING ON DISTRIBUTION AND GROWTH

This paper deals with the influence of different types of government expenditure on growth. It widens that proposed by the literature which follows the lines set by Barro (1990) because it adds the changes working through the demand side, generated by the variations in the distribution of the net income of the economy, to those working through the supply side, generated by the variations in factor productivity. The analysis considers a government sector with a balanced budget and an autonomous and nonlinear investment function, interpreted along a Kaleckian and a Classical-Harrodian line. It shows under which conditions different types of government expenditure are beneficial or detrimental for economic growth, comparing some results with those reached by Barro (1990) and points out the emergence of phenomena like multiple equilibria, hysteresis and low growth traps.

Government Spending and Rural Income: A Behavioral Approach

This paper examines the role of government spending in the rural sector in Latin America. We estimate the effect of various forms of government spending on rural income explicitly considering the interactions among the various types of government expenditures. Most previous analyses have concentrated on either the aggregate level of government expenditures or specific components of various expenditures in isolation. Using data from eleven Latin American countries for the period of 1985 to 2001, we are able to pinpoint not only the substitution among specific expenditures but we also show the existence of important complementarities among certain expenditure pairs.

Does Allocation of Public Spending Matter in Poverty Reduction? Evidence from Thailand*

The present paper uses a panel dataset to estimate the marginal returns to different types of government expenditure on agricultural growth and rural poverty reduction in Thailand. The study finds that additional government spending on agricultural research provides the largest return in terms of agricultural productivity and has the second largest impact on rural poverty reduction. Increased investment in rural electrification has the largest poverty reduction impact, mainly through improved nonfarm employment. Rural education has the third largest impact on both productivity and poverty reduction. Irrigation has a positive impact on agricultural productivity, but regional variation is considerable. Government spending on rural roads has no significant impact on agricultural productivity and its poverty reduction impact ranks last among all investment alternatives considered. Additional investment in the Northeast Region has a greater impact on poverty reduction than in other regions.

Public Expenditure, Growth and Poverty Reduction in Rural Uganda

Abstract: Using district‐level data for 1992, 1995, and 1999, the study estimated effects of different types of government expenditure on agricultural growth and rural poverty in Uganda. The results reveal that government spending on agricultural research and extension improved agricultural production substantially. This type of expenditure had the largest measured returns to growth in agricultural production. Agricultural research and extension spending also had the largest assessed impact on poverty reduction. Government spending on rural roads also had a substantial marginal impact on rural poverty reduction. The impact of low‐grade roads such as feeder roads is larger than that of high‐grade roads such as murram and tarmac roads. Education's effects rank after agricultural research and extension, and roads. Government spending in health did not show a large impact on growth in agricultural productivity or a reduction in rural poverty. Additional investments in the northern region (a poor region) contribute the most to reducing poverty. However, it is the western region (a relatively well‐developed region) where most types of investment have highest returns in terms of increased agricultural productivity.

Government Spending, Growth and Poverty in Rural India

AbstractUsing state‐level data for 1970–93, a simultaneous equation model was developed to estimate the direct and indirect effects of different types of government expenditure on ruralpoverty and productivity growth in India. The results show that in order to reduce rural poverty, the Indian government should give highest priority to additionalinvestments in ruralroads and agriculturalresearch. These types of investment not only have much larger poverty impacts per rupee spent than any other government investment, but also generate higher productivity growth. Apart from government spending on education, which has the third largest marginalimpact on ruralpoverty and productivity growth, other investments (including irrigation, soil and water conservation, health, and rural and community development) have only modest impacts on growth and poverty per additional rupee spent.

Dépenses publiques et cycle économique

We analyze a stochastic general equilibrium model which incorporates three different types of government expenditure. We calibrate the model and estimate, using US data, the multivariate stochastic process generating the components of public expenditure and the Solow residual. These estimates allow us to evaluate the multiplier effects of fiscal spending in the neoclassical model, when the shocks are as persistent as those observed in the data. We also evaluate the degree to which the multiplier effects depend on how public spending is financed. Then, we simulate the model in order to analyze the impact of public expenditure shocks on the comovements of economic aggregates.