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We examine the impact of public debt changes as well as the effects of the business cycle on the expenditure multipliers. We adopt the structural vector autoregressive (SVAR) methodology on quarter...

This paper examined the impact of fiscal policy on non-oil GDP in Saudi Arabia, the world’s largest oil exporter, over the annual period 1989–2018. We employed various cointegration methods within ...

Ensuring housing affordability while controlling government expenditure is a concern in many countries. In the UK support for private renters is delivered via an income-related housing benefit calc...

The study used time series data from 1980 to 2018 and the Nonlinear ARDL approach to analyse the asymmetric impacts of fiscal policy on economic growth in Nigeria. The bounds test findings indicate...

This study investigates the correlation between government expenditures and economic growth by applying the wavelet coherence approach for the period of 1960Q2 – 2019Q3 in the United States. Two ma...

In a post-Keynesian growth model with positive saving propensity out of wages, this paper analyses the implication of different kinds of government expenditures on aggregate demand and economic gro...

We study the long-run relationship between expenditure conditionality in IMF programmes and the composition of public spending. We compile a granular dataset on government expenditure conditions in...

This paper examines the effect of IMF programs on poverty, income inequality and government expenditure on education and health. It distinguishes between non-concessional and concessional programs ...

Purpose Arterial hypertension is one of the most common diseases in the world, presenting a great impact on global mortality. Despite having good medication, the best control depends on patient's adherence. Our aim is to characterize the relationship of adherence to medication in hypertensive patients with consultation length and other organizational factors of healthcare systems. Patients and methods We performed a comprehensive review of literature using the MeSH terms "hypertension" and "medication adherence". 61 articles were selected for inclusion and adherence parameters were extracted, allowing us to estimate the mean adherence for each country. The adherence was then correlated with organizational aspects of healthcare systems: consultation length, number of health providers (doctors, nurses and pharmacists), number of hospital beds, health expenditure and general government expenditure. Results Adherence to medication ranged between 11.8% in Indonesia and 85.0% in Australia. There is much heterogeneity in methodology, but the Morisky Medication Adherence Scale was the preferred method, used in 63.6% of the cases. We found no relation with consultation length, but a significant one with the greater number of health professionals available. Some differences were observed when considering European countries or Morisky Medication Adherence Scale alone. Conclusion The better the drugs, the better the control of blood pressure, if patients take them. Rather than investing in the prescription of more drugs, it is important to address non-adherence and reduce it to promote better blood pressure control. Organizational factors are relevant constraints and depend on administrative and political decisions. Although they are not always considered, they greatly impact the adherence to medication.

The authors look at the effect of the composition of government spending on per capita GDP level using Classification of the Functions of Government (COFOG) data. Government spending on education w...

Unlike previous studies on causal relationships between government revenue and expenditures in China, this study takes into consideration structural breaks in the data by performing wavelet decompo...

We examine the government revenue and government expenditure nexus using a panel of 26 Indian states from 1980–1981 to 2014–2015. While most of the previous literature claims that revenue and expen...

This article seeks to explore whether a reduction in the government expenditure would necessarily reduce the fiscal deficit to GDP ratio or not. It has been theoretically argued that this would rea...

In most Organization for Economic Cooperation and Development (OECD) countries, the unemployment rate increased considerably during the early stage of the Great Recession of 2008. However, unemploy...

This study examines the dynamics of the displacement effect. Using government expenditure data from 1972 to 2006, this study finds evidence of the displacement effect in government expenditures immediately following German reunification, along with changes in both the composition of government expenditures and funding allocation authority between local and federal governments. These findings suggest that social disturbances play a significant role in determining the functional composition of government spending and have the potential to reverse the trend of fiscal decentralization.

This study examines the repercussions of oil price and macroeconomic distortions on government expenditure in 15 oil-exporting countries. Adapting the Pooled Mean Group analytical approach, the lon...

The topic of the optimal government size has been extensively examined at both theoretical and empirical levels, however, it has not been researched for the Egyptian economy mainly due to t...

This paper considers the problem of jointly determining the optimal income tax rate and the optimal degree of enforcement by the authorities. It extends the analysis of Keen and Slemrod, who combine the well-known elasticity of taxable income with an enforcement elasticity of taxable income. The model is extended to the many-person context with both differing wages and preferences, and with a tax and transfer system along with the desire for redistribution on the part of the government. The effect of inequality, defined in terms of an equally-distributed-equivalent taxable income measure, is explored. There is also government expenditure on a pure public good. The model is also extended to allow for a direct effect on labour supply of tax enforcement, and the implications for the optimal enforcement gap.

This paper studies the responsiveness of government expenditures to business cycles and introduces an index of asymmetric government expenditures using panel data for advanced and developing countr...

Since 2010, Russia’s defense spending has seen an average annual real growth of 10%, causing a profound shift in the composition of government expenditure. This article examines the formal and info...

The present study examines the impact of physical economic development proxied by road density, air transport facilities, tourism infrastructure measured in terms of availability of hotels, and crime activities on the arrival of foreign visitors, domestic visitors, and revenue receipts from tourism in 25 Indian states using a state-level panel data covering the period 1995–2011. The empirical estimate reveals that economic development, world heritage sites and availability of hotels significantly increase inflow of foreign and domestic visitors in Indian states. However, crime activities adversely affect the inflow of foreign and domestic tourists in short run, while major terror attacks do not significantly impact tourist arrivals. Finally, the estimates from IV-Tobit model show that road density, availability of land check post facility and government expenditure on the tourism industry leads to a significant increase in tourism receipts.

Violence against women (VAW) is now acknowledged as a global problem with substantial economic costs. However, the current estimates of costs in the literature provide the aggregate loss of income, but not the macroeconomic loss in terms of output and demand insofar as they fail to consider the structural interlinkages of the economy. Focusing on Vietnam, this study proposes an approach based on the social accounting matrix (SAM) to estimate the macroeconomic loss due to violence. Using Vietnam’s 2011 SAM, the study estimates the income and multiplier loss due to VAW. From a policy point of view, the study argues that the macroeconomic loss due to VAW renders a permanent invisible leakage to the circular flow that can potentially destabilize, weaken, or neutralize the positive gains from government expenditure on welfare programs.

The UK's government auditors, the National Audit Office (NAO), play a central role in the accountability relations surrounding government expenditure. Commonly portrayed as being independent, they ...

This study adopts a disaggregated regional focus to test for the human capital (HC)-growth nexus in selected nine Asian countries. It utilizes the Empirical Bayesian methodology which addresses not only the heterogeneity issue but it also utilizes the common structural priors of regional countries to yield ‘informationally’ efficient estimates of the impact of HC on the stock and levels of GDP. Various measures of HC are utilized to determine which of these produces a better explanation of economic growth in the two Asian regions. The study finds that primary and secondary education was more prominent in explaining the fluctuations of economic growth in East Asia, whereas tertiary and vocational education showed positive effects on economic growth in South Asia. Government expenditures on education were also found to positively affect economic growth in both regions. The results shed new evidence to establish that the differences in growth rates within East and South Asia are associated with diffe...

We revisit Wagner’s law by function of government expenditure. Using data of 14 European countries between 1996 and 2013, we apply panel data and SUR methods to assess public expenditure–income elasticities. We find that some functions of government spending for a few countries (e.g. Austria, France, the Netherlands and Portugal) validate Wagner’s law. For the Netherlands, expenditures with environment protection increase more than proportionately to economic growth, and for France that is the case of spending in housing and community amenities. In addition, Greece is the only country where two public spending items react more than one to one to growth. info:eu-repo/semantics/publishedVersion

This paper explores the relationship between government spending and environmental quality using panel data for 94 countries for the period 1970–2008. We identify and estimate three distinct channels that comprise the total direct effect of government expenditure on air pollution, namely a marginal effect, an effect conditional on economic growth and an effect conditional on institutional quality. Since adjustment rate of emissions to their equilibrium level is slow due to technological and institutional reasons, we explicitly take into account dynamics by applying appropriate econometric methods. The results demonstrate that there is a significant alleviating direct effect of government expenditure on SO2 and NOx emissions, which increases with the level of economic growth and democracy. However, there is no evidence of a significant effect on pollutants with more global impact on the environment and human health, like N2O and CO2, implying that the adoption of international environmental treaties is req...

This paper investigates the effect of military burden on economic growth and extends previous works on the optimal size of government expenditure by exploring how external threat affects the preferences of the households and, in turn, economic growth. Post World War II Italian data are used to estimate nonlinear growth models using time-series semi-parametric methods. The estimates show that total government and civilian burdens are productive, whereas, military burden has significant effects on economic growth through the expenditure for peacekeeping missions, which reduces the insecurity in the home country. This may justify economically the current not negligible budget devoted to peacekeeping and humanitarian missions.

This paper studies the long-run relationship between health care expenditure and income using a panel data set of emerging economies over the period 1995–2012. The results show that expenditure on health care and income are non-stationary and cointegrated. After controlling for cross-sectional dependence and unobserved heterogeneity among different countries, we find that the income elasticity of health care is less than 1, indicating that health care is a necessity and not a luxury. Government expenditure and out-of-pocket expenditure turn out to be important determinants of health care expenditure. Among non-monetary factors, results show that old age dependency and female education seem to have significant bearings on health care expenditures. Policy recommendations suggest that government should increase spending on health care in emerging economies since higher incomes may not automatically translate into higher health care spending by the people of these countries.

Using recent econometric techniques based on fractional integration, we find that developing countries recover their economic growth faster than developed countries in response to a shock. Following this methodology, we find that longer civil conflicts are associated with a faster recovery process. We further investigate this issue by exploring correlations with components of GDP, military spending, institutions and aid and find heterogeneous effects of these channels by duration of conflict. Higher government spending is correlated with faster recoveries post longer conflicts, and higher consumption spending is linked to faster recoveries following shorter conflicts. Military spending appears to be driving the government expenditure that makes countries recover from longer conflicts. More democratic institutions are associated with faster recoveries post short wars but slower recoveries following long wars.

Available literature has shown that the impact of total government expenditure as well as government expenditure by type of economic growth is mixed. This study extends this literature by examining the impact of government expenditure on agriculture, on Nigeria's economy from 1970 to 2006. General-to-specific methodology of time series econometrics was utilised to arrive at the preferred error correction model that was used to determine the impact of government spending on agriculture and on economic growth. In consonance with economic theory, the results showed that the total expenditure on agriculture had a positive significant effect on Nigeria's economic growth in the long run with elasticity of 0.32 during the period under review. The results also showed that economic growth was independent of recurrent expenditure, but dependent (positively) on capital expenditure in the long run with elasticity of 0.36. The implication is that agriculture should be given priority in budgetary allocation and capital spending to promote economic growth in Nigeria.

Using long-range dependence techniques we examine the order of integration of Angola’s macro variables from a fractional viewpoint. Based on a small open economy model, the series examined are money reserves, credit, money supply, lending rate, exchange rates, CPI, GDP, oil revenues and government expenditure, for the period of January 2000 to December 2013. The results suggest that the variables are nonstationary with orders of integration equal to or higher than 1 suggesting nonmean-reverting behaviour. Structural breaks reveal that the series reflect the IMF intervention in Angola in 2003 to control inflation. Policy implications are derived.

This article provides empirical evidence regarding the effect of the size of government on economic growth in the Brazilian economy for the period from January 2000 to March 2013. In particular, an analysis is conducted to see whether the Armey curve fits well for the Brazilian case and the optimal government size is also estimated. The findings indicate that an increase in the size of government contributes to economic growth and that the optimal size for the Brazilian government would be approximately 22% of GDP. Brazil crossed over this limit in 2005.

Based on annual data from Japan for the period 1960 to 2010, we investigate the government expenditure–economic growth relation in Japan by using the autoregressive distributed lag test for threshold cointegration developed by Li and Lee (2010). In particular, we evaluate the validity of Wagner’s view and the Keynesian view in the case of Japan. The empirical results presented herein indicate that of these two classical economics perspectives, only Wagner’s view holds for Japan. The findings also demonstrate that the adjustment process towards its long-run equilibrium is asymmetric.

This paper uses vector autoregressive models to investigate which government spending category has been more beneficial for private economic growth in the short and long run. To that end, the analysis considers a longtime horizon to detect contemporaneous and lagged cyclical effects of government spending and underlying components on the economy as well as common trends over time. Moreover, the paper demonstrates how the Egyptian government managed to frequently increase the current expenditure ratios in the state budget, and the economic consequences of such increases on private activity. More specifically, the paper explores the extent to which government spending categories played a role in enhancing private investment and hence contributed indirectly to private economic growth. The paper arrives at the following conclusions. First, the effect of the various government expenditure ratios on economic growth is generally weak. In contrast, the effect of private investment on growth is dominant. Second, w...

By examining trade imbalances using 40 countries including Euro-zone countries, we show that the trade imbalance has been exacerbated after joining the Euro zone for the member countries, and the intra trade has greater impact on the imbalance than the offshore trade. For the trade between northern countries and southern countries in the Euro-zone, the imbalance worsens after joining the Euro zone. The bilateral gaps in the government expenditure and the unemployment have significant effect. Excessive government expenditure leads to the increase in the trade imbalance.

In this article, we model the government expenditure on the welfare change of general public by means of static and dynamic binary response model for panel data. We analyse the effectiveness of the total magnitude and the structure of the Chinese government expenditure on the basis of its effects on the welfare of Chinese citizens. We construct both the static and dynamic models. And we also do a further analysis of the state dependence of the welfare change of Chinese citizens by means of the survival analysis. The estimation results imply that the total amount of the Chinese government expenditure is not oversized but its allocation is not efficient. And expenditures in some fields are not utilized efficiently.

In Nigeria, the government activities vis-à-vis public expenditure has grown rapidly both in absolute, relative and as a share of GDP over the years. These growths in government expenditure have been due to certain factors which are believed to have significant effect on the fiscal operation of the country. These perceived implications of government expenditure expansion on the economy necessitate the need to understand factors that are responsible for the growth in government expenditure size. For that, the study employs a slightly modified version of Wagner’s law by incorporating new variables such as oil revenue, trade openness, public debt, exchange rate, oil price, taxation and inflation—to examine their effect on government expenditure size. The study uses time series data for Nigeria spanning between 1970 and 2017. Time series data were analysed using Autoregressive Distributed Lag (ARDL) model. The findings of the study reveal that oil revenue, GDP, population, trade openness, oil price, taxation and inflation are important determinants of the size of Nigeria’s government expenditure. The study recommends among others that the revenue base of the country should be diversified beyond oil sector, strengthening of fiscal and monetary policies to ensure stability in price level and exchange rate, the use of fiscal rule through excess crude oil account should also be strengthened to create buffer against fluctuation in oil price and as well appropriate population reduction policies should be undertaken to curtail rapid population growth.

The article investigates the causal relationships between internet, economic growth, government expenditure and inflation in 34 OECD countries during the period 1990 to 2010. Using panel co-integration, empirical results show that they are co-integrated. Moreover, there exists bidirectional causality between internet and economic growth, inflation and economic growth and inflation and internet.

This paper evaluates whether reforms associated with the New Public Management (NPM) doctrine led to a reduction in public sector expenditure and employees. Savings and downsizing the public sector were a major justification when the international movement of public sector reforms began in the 1980s. Since then, NPM has been the subject of extensive academic debate as to its successes and failures. However, empirical assessments of whether NPM reached its stated objectives are relatively scarce, mainly due to the difficulty of quantifying the impact of such reforms. This paper is an attempt to do this, especially looking at outsourcing and decentralization. We test a number of hypotheses related to the outsourcing and decentralization effects on public sector expenditure and employees through an econometric analysis using a panel data model for eighteen European Countries over the period 1980 to 2010. The results suggest a positive correlation between the degree of outsourcing in the provision of public services and government spending in the short term. On the other hand we find that decentralization tends to decrease the size of general government, particularly in the long-run.

This article empirically investigates whether human capital constrains the impact of Foreign Direct Investment (FDI) and remittances on economic growth in Ghana. An economic growth model for Ghana is specified and estimated using Fully Modified Ordinary Least Squares (FMOLS) estimator and employing annual data spanning the period 1965 to 2008. Empirical results indicate that FDI and remittances are key determinants of economic growth in Ghana. Results indicate that human capital enhances the impact of FDI and remittances on economic growth. Although both government expenditure and trade openness are growth-enhancing, government expenditure appears to crowd-out private investment. Empirical results also indicate that domestic inflationary pressures, unstable political environment and volatile global economy exert a negative impact on economic growth in Ghana.

European countries have experienced population aging and consequent pressure on public pensions. Some European countries, therefore, have welcomed migrants, expecting that the inflow of people will ease the demographic and fiscal problems. It is important to ask if this policy approach has had the intended effects. This paper examines the effects of labor migration on public pension systems. Using error correction models (ECMs) with cross-country time-series data on European countries from 1981 to 2009, this analysis demonstrates that labor migration has deterred the reduction of public pension benefit levels and government expenditure on pension as well as the expansion of private pensions. This implies that labor migration eases the pressure on public pension systems. Migration contributory effects have been larger in countries with Bismarckian pension systems because those countries have experienced greater pressure on public pension systems than other countries.

The sustainability and viability of a country's economic and social growth depend largely on vibrant healthcare sector of that nation. While healthcare needs is increasing, government expenditure o...

Theoretical developments, improved methodologies and more extensive data have helped generate a dramatic increase in the literature testing for the impact of government size and fiscal policy on economic growth in recent years. We review a range of the more recent evidence and examine (1) the consistency or robustness of the results, (2) how these results differ from the earlier literature and (3) their usefulness as a guide to policy reform in practice. We find that the last decade has produced more robust evidence and more plausible orders of magnitude on the impact of fiscal policy on growth. However, the value of this evidence remains limited as a basis for quantifying macro-economic responses to fiscal policy reform in practice.

This paper contributes to the debate on the effects of fiscal stimuli by showing that the impact of government expenditure depends on its composition. Government spending is not homogeneous and its effects on economic variables vary depending on its type. Comparing the effects of three types of government spending (investment, wage and non-wage components of consumption), it is concluded that government investment shocks are not the most effective spending shocks in boosting output, contrary to common opinion. Instead, the wage component government consumption has the biggest impact, whereas the non-wage component government consumption has the least. This variation stems mainly from the effects on (private) consumption.

Governments are seeking to reduce levels of expenditure. In the reform of the Common Agricultural Policy (CAP) it will be important to deliver the environmental objectives of agricultural policy more cost-effectively. This paper reviews the different agri-environmental mechanisms and their relative scale and performance. Likely reductions in the Single Farm Payment (SFP) imply a need to shift resources from payments for the reduction of intensity towards payments to prevent abandonment. More cost-effective policies may be achieved by shifting funds from the SFP into more targeted mechanisms, changing standards currently achieved by cross-compliance into regulations, and increasing targeting and competitive allocation mechanisms.

This article discusses the 2003 plan to combine local authorities in Israel and its implementation. In the framework of this plan, 28 local authorities were unified into 12 authorities, including some in the non-Jewish sector, so as to reduce government expenditure and to enable the local authorities to function more efficiently. This article will show that while unification did not always achieve its goals, in nearly all the unified Jewish municipalities that did succeed success was outstanding; by contrast, all unifications in the non-Jewish sector failed.

Employing data for 1981–2009, this paper examines the factors influencing the volatility of state output, using India as a case study. The analysis appears to suggest that high income states exhibit relatively higher output volatility. At the state-level, the proximate determinants of a decline in output volatility can be traced to financial deepening, government expenditures and institutional quality. Also, state-level political factors are also found to play an important role. In addition, at the macroeconomic level, monetary policy considerations are observed to be the most important factor impacting output volatility.

GDP figures for Africa are unreliable. More dependable information can be found in government expenditure and international trade records. These records, though, provide little insight into non-market output. In this paper an attempt is made to draw explicit conjectures on real output per head in preindependence Africa on the basis of trade data so that conjectures can be established about Africa’s long-run growth. Two alternative approaches are considered. One estimates per capita GDP by assuming no increase in output per head outside the tradable sector, for which the purchasing power of per capita exports is accepted as a proxy. Another approach establishes an econometric association between real per capita GDP and the income terms of trade per head for 1950-1990 and, on the basis of the prediction equation’s parameters and the values of the RHS variables, infers real output per head for 1870-1938. Trends in real output per head are then drawn for Africa (and its main regions). By comparing these trends with those from other developing regions, some conjectures about Africa’s relative position over time are put forward. It emerges that economic growth started earlier than usually assumed and there is continuity in growth before and after colonial independence. Sub- Saharan Africa’s retardation is a gradual process, as growing and falling behind took place simultaneously. But it is in the period 1975-1995 when the worst setback in modern Africa’s history took place

We explore the relationship between economic growth, government expenditure and other sources of income for museums and libraries in England. Using data from 1981/82 to 2008/09, we investigate whether funding patterns in these two sectors behave differently in response to changes in economic growth. We also explore whether and how these responses are influenced by factors such as the type of local authority in which these organisations operate. The paper finds differences between and within these sectors in terms of their responsiveness to changes in government expenditure. The chosen period of analysis allows for comparisons during two periods of cultural policy in England: two Conservative governments until 1997 and the New Labour era. Our findings are of policy relevance as cultural organisations in most Western economies are once again facing significant funding cuts and a new wave of requests from funders for more sustainable funding diversification strategies.