Search results for: fiscal federalism

Authors: Pascal Horni, Sandro Fuchs

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In presence of increasing deficits and public debt among OECD countries, the debate on fiscal disciple and mechanisms to constrain public spending policy heated up and gave rise to the institutionalization of fiscal rules. Considering the notions from political economy literature and the therein advocated axiom of maximization of votes, introduction of institutional mechanisms and rules to govern public spending is likely to be coined by electoral motives. While there exists a series of research concerned with the rise of creative accounting in the presence fiscal rules, implementation of accrual government accounting and its impact on the biting of fiscal rules has to authors’ best knowledge never been explored. This paper serves the illumination of the connection between debt break mechanisms and the adoption of accrual public sector accounting standards such as the IPSAS in the interface of political economy in the Swiss context. By explicitly considering the technical accounting dimension, this paper develops an integrated conceptual view on well-established Public Financial Management (PFM) institutions and elaborates how their interdependencies can co-create value with regard to the contemporary challenge of fiscal sustainability. Derivation of this integrated view follows an explorative approach, taking into account expert interviews with director level staff from cantonal finance administrations and policy documents, as well as literature from both research areas – public sector accounting and political economy.

Keywords: accounting, fiscal rules, International Public Sector Accounting Standards (IPSAS), public financial management

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Authors: Siphat Lim

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This study used Autoregressive Distributed Lag (ARDL) approach to cointegration. In the long-run the general price level and exchange rate have a positively significant effect on domestic output. The estimated result further revealed that fiscal stimulus help stimulate domestic output in the long-run, but not in the short-run, while monetary expansion help to stimulate output in both short-run and long-run. The result is complied with the theory which is the macroeconomic policies, fiscal and monetary policy; help to stimulate domestic output in the long-run. The estimated result of the Vector Error Correction Model (VECM) has indicated more clearly that the consumer price index has a positive effect on output with highly statistically significant. Increasing in the general price level would increase the competitiveness among producers than increase in the output. However, the exchange rate also has a positive effect and highly significant on the gross domestic product. The exchange rate depreciation might increase export since the purchasing power of foreigners has increased. More importantly, fiscal stimulus would help stimulate the domestic output in the long-run since the coefficient of government expenditure is positive. In addition, monetary expansion would also help stimulate the output and the result is highly significant. Thus, fiscal stimulus and monetary expansionary would help stimulate the domestic output in the long-run in Cambodia.

Keywords: fiscal policy, monetary policy, ARDL, VECM

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Authors: Walaa Diab, Baher Atlam, Nadia El Nimer

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Egypt faces many obvious economic challenges, and it is so clear that a real economic transformation is needed to address those problems, especially after the recent decisions of floating the Egyptian pound and the gradual subsidy cuts that are trying to meet the needed conditions to get the IMF support of (a £12bn loan) for its economic reform program. Following the post-2008 revival of the interest in the fiscal policy and its vital role in speeding up or slowing down the economic growth. Here comes the value of this paper as it seeks to analyze the macroeconomic effects of fiscal policy in Egypt by applying A Bayesian SVAR Approach. The study uses the Bayesian method because it includes the prior information and no relevant information is omitted and so it is well suited for rational, evidence-based decision-making. Since the study aims to define the effects of fiscal policy shocks in Egypt to help the decision-makers in determining the proper means to correct the structural problems in the Egyptian economy, it has to study the period of 1990s economic reform, but unfortunately; the available data is on an annual frequency. Thus, it uses annual time series to study the period 1991: 2005 And quarterly data over the period 2006–2016. It uses a set of six main variables includes government expenditure and net tax revenues as fiscal policy arms affecting real GDP, unemployment, inflation and the interest rate. The study also tries to assess the 'crowding out' effects by considering the effects of government spending and government revenue shocks on the composition of GDP, namely, on private consumption and private investment. Last but not least the study provides its policy implications regarding the needed role of fiscal policy in Egypt in the upcoming economic reform building on the results it concludes from the previous reform program.

Keywords: fiscal policy, government spending, structural vector autoregression, taxation

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Authors: Ying Guo, Miaochan Li, David Yang, Xiao-Yan Li

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This paper examines the relevance of accounting information to stock prices at different periods using manufacturing companies listed in China’s Growth Enterprise Market (GEM). We find that both the average stock price at fiscal year-end and the average stock price one month after fiscal year-end are more relevant to the accounting information than the closing stock price four months after fiscal year-end. This implies that Chinese stock markets react before the public disclosure of accounting information, which may be due to information leak before official announcements. Our findings confirm that accounting information is relevant to stock prices for Chinese listed manufacturing companies, which is a critical question to answer for investors who have interest in Chinese companies.

Keywords: accounting information, response time, value relevance, stock price

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Authors: S. K. Ashiquer Rahman

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The proper policy handling might not able to attain the target since some of recessions, e.g., pandemic-led crises, the variables shocks of the economics. At the level of this situation, the Central bank implements the monetary policy to choose increase the exogenous expenditure and level of money supply consecutively for booster level economic growth, whether the monetary policy is relatively more effective than fiscal policy in altering real output growth of a country or both stand for relatively effective in the direction of output growth of a country. The dispute with reference to the relationship between the monetary policy and fiscal policy is centered on the inflationary penalty of the shortfall financing by the fiscal authority. The latest variables socks of economics as well as the pandemic-led crises, central banks around the world predicted just about a general dilemma in relation to increase rates to face the or decrease rates to sustain the economic movement. Whether the prices hang about fundamentally unaffected, the aggregate demand has also been hold a significantly negative attitude by the outbreak COVID-19 pandemic. To empirically investigate the effects of economics shocks associated COVID-19 pandemic, the paper considers the effectiveness of the monetary policy and fiscal policy that linked to the adjustment mechanism of different economic variables. To examine the effects of economics shock associated COVID-19 pandemic towards the effectiveness of Monetary Policy and Fiscal Policy in the direction of output growth of a Country, this paper uses the Simultaneous equations model under the estimation of Two-Stage Least Squares (2SLS) and Ordinary Least Squares (OLS) Method.

Keywords: IS-LM framework, pandemic. Economics variables shocks, simultaneous equations model, output growth

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Authors: Nora Yusma Bte Mohamed Yusoff, Hussain Ali Bekhet

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The rationalization of a gradual subsidies reforms plan has been set out by the Malaysian government to achieve the high-income nation target. This paper attempts to analyze the impacts of energy subsidy reform policy on fiscal deficit and macroeconomics variables in Malaysia. The Computable General Equilibrium (CGE) Model is employed. Three simulations based on different groups of scenarios have been developed. Importantly, the overall results indicate that removal of fuel subsidy has significantly improved the real GDP and reduced the government fiscal deficit. On the other hand, the removal of the fuel subsidy has increased most of the local commodity prices, especially energy commodities. The findings of the study could provide some imperative inputs for policy makers, especially to identify the right policy mechanism. This is especially ensures the subsidy savings from subsidy removal could be transferred back into the domestic economy in the form of infrastructure development, compensation and increases in others sector output contributions towards a sustainable economic growth.

Keywords: CGE, deficit, energy, reform, subsidy

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Authors: Eliane Cristina De Carvalho Mendoza Meza

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The Brazilian Federal Constitution from 1988 innovated with decentralized management, sharing the decision process among the federal government, states, and municipality (federalism). This innovation gave the opportunity to the civil society participates in the public policy agenda, including the municipal one; the state recognized that new actors were needed now it has been one more actor and not the only one. It was in this context that the woman’s Policy Secretaries were created in the three levels of government: federal, state and municipal. It intend to reduce the historical and social differences between men and women, especially in the poorest municipalities, working in a network basis with other secretaries, governmental institutions and non-governmental organizations to promote actions that can result in benefits and empowerment for women. In addition, they promote actions to protect them from domestic violence and to help them to learn how generate income. It was not a calm process, women have been fighting for their rights since the 1970s and despite the gender equality was recognized in the Federal Constitution of 1988, just in 2013 it was possible to see a real growth in the creation of municipal Women’s Policy Secretary. In 2009, just 6.5% of the cities in Brazil had implemented the Secretary; in 2013, it was 11%. The municipality realized that the gender issue was in reality a public problem, so the municipal agenda incorporated it and transformed in public policy, creating the municipal Women’s Policy Secretary. The introduction of a gender policy in Brazilian municipalities shows us that the female citizens are treated as political subjects and it is the first step to try to compensate inequality between men and women in the local level. It becomes more important when the Brazilian federalism is analyzed. In Brazil, the federal government controls the municipalities’ budgets to implement federal public policies and others federal interests, so having a public policy of gender approved by the actors in the local government with so little freedom to manage is something very important. It is necessary mark some points: taking a gender policy to the poorest cities is a form to protect all citizens with no distinction, men and women, as recommended in the Federal Constitution; not all problems in a city center in the municipal agenda, this only happens when a problem is perceived as an issue, it means the women situation was perceived as important, so that it became a public policy; at least, the gender public policy intend to emancipate and contemplate the empowerment of women.

Keywords: federalism, gender, municipal agenda, social participation

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Authors: Marcos Centurion-Vicencio

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This study discusses the idea of ‘dominance’ in economic policy and its practical influence over monetary decisions. The discretionary use of repurchase agreements in Brazil over the period 2006-2016 and its effects on the overall price level are the specific issues we will be focusing on. The set of in-depth interviews carried out with public servants at the Brazilian central bank and national treasury, alongside data collected from the National Institution of Statistics (IBGE), suggest that monetary and fiscal dominance do not differ in nature once the assumption of depoliticized central bankers is relaxed. In both regimes, the pursuit of private gains via public institutions affects price stability. While short-sighted politicians in the latter are at the origin of poor monetary decisions, the action of short-sighted financial interest groups is likely to generate a similar outcome in the former. This study then contributes to rethinking monetary policy theory as well as the nature of public borrowing.

Keywords: fiscal and monetary interactions, interest groups, monetary capture, public borrowing

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Authors: Shaho Ghafur Ahmed

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The right to self-determination of peoples is a fundamental human right recognized by the principles of international law. It could be embodied in the internal level in the form of federalism. Most federal constitutions prevented the secession of constituent entities, while some remained silent, as the case of Iraq, and rare instances of them recognize it. But, after the failure of federalism, these entities seek to separate whenever the opportunity arises. In several cases, they have resort to peaceful methods in some others they resort to force. The constitutional Supreme Court, which guaranty the unity and integrity of the State, often prevent these attempts. After not a commitment of federalism in Iraq, which has been founded since 2004, the Kurdistan region, as the only federated entity, has conducted a unilateral referendum on 25 September 2017 for its independence. The Iraqi government refused it. The Iraqi Federal Supreme Court, through interpreting the constitutional provisions, decided that this referendum and it’s purposes, which was the independence of the region, was unconstitutional. Subsequently, the Iraqi government used forces and blockaded the region so as to force it to turn off this process. So, in this paper, the right to self-determination of the peoples in federated entities and its obstacles will be discussed through the comparative legal basis and analyzing the decisions of the Federal Constitutional Courts. We will compare the role that the Supreme Court of Canada played regarding the referendum that operated in Quebec in 1995, in which it refused only the unilaterally attempts for the independence of this province. While, in the case of the Kurdistan region, the Iraqi Federal Supreme Court has definitively refused this right. No measures were taken by this Court to protect the region from the Iraqi government reactions. This decision led to the questioning of the neutrality of this Court. So, from the point of view of the Kurdistan region, this Court became a political instrument to prevent it to be independent in the international community, in the absence of a clear constitutional provision, through an abstract and an incomplete interpretation of federal constitutional provisions.

Keywords: right of self-determination, federal supreme court, supremacy of federal constitution

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Authors: Shierwin Agagen Cabunilas

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The unitary form of Philippine government has built a tradition of bureaucracy that strengthened oligarch and clientele politics. Consequently, the Philippines is lagged behind development. There is so much poverty, unemployment, and inadequate social services. In addition, it seems that the rights of national ethnic minority groups like the Igorots to develop their political and economic interests, linguistic and cultural heritage are neglected. Given these circumstances, a paradigm shift is inevitable. The author advocates a transition from a unitary to a federal system of government. Contrary to the notion that a unitary system facilitates better governance, it actually stifles it. As a unitary government, the Philippines seems (a) to exhibit incompetence in delivering efficient, necessary services to the people and (b) to exclude the minority from political participation and policy making. This shows that Philippine unitary system is highly centralized and operates from a top-bottom scheme. However, a federal system encourages decentralization, plurality and political participation. In my view, federalism is beneficial to the Philippine society and congenial to the Igorot indigenous peoples insofar as participative decision-making and development goals are concerned. This research employs critical and constructive analyses. The former interprets some complex practices of Philippine politics while the latter investigates how theories of federalism can be appropriated to deal with political deficits, ethnic diversity, and indigenous peoples’ rights to self-determination. The topic is developed accordingly: First, the author briefly examines the unitary structure of the Philippines and its impact on inter-governmental affairs and processes, asserting that bureaucracy and corruption, for example, are counterproductive to a participative political life, to economic development and to the recognition of national ethnic minorities. Second, he scrutinizes why federalism might transform this. Here, he assesses various opposing philosophical contentions on federal system in managing ethnically diverse society, like the Philippines, and argue that decentralization of political power, economic and cultural developments are reasons to exit from unitary government. Third, he suggests that federalism can be instrumental to Igorots self-determination. Self-determination is neither opposed to national development nor to the ideals of democracy – liberty, justice, solidarity. For example, as others have already noted, a politics in the vernacular facilitates greater participation among the people. Hence, there is a greater chance to arrive at policies that serve the interest of the people. Some may wary that decentralization disintegrates a nation. According to the author, however, the recognition of minority rights which includes self-determination may promote filial devotion to the state. If Igorot indigenous peoples have access to suitable institutions to determine their political life, economic goals, social needs, i.e., education, culture, language, chances are it moves the country forward to development fostering national unity. Remarkably, federal system thus best responds to the Philippines’s democratic and development deficits. Federalism can also significantly rectify the practices that oppress and dislocate national ethnic minorities as it ensures the creation of localized institutions for optimum political, economic, cultural determination and maximizes representation in the public sphere.

Keywords: federalism, Igorot, indigenous peoples, self-determination

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Authors: Fatbardha Kadiu, Nulifer Caliskan

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The value added tax came as a necessity of substituting the old tax on sales. Based on the advantages of this new tax in our days it is used successfully in more than 140 countries around the world. The aim of the paper is to describe the nature of this tax with its advantages and disadvantages. Also it will describe the way how it functions in most of the European countries and the actual challenges of these countries on value added tax. It will be present the types of goods which are exempt from this tax, the reasons and the consequences of those exemptions. The paper will be based on secondary data taken from respective literature. An econometric model will be present in order to identify the dependence of value tax from other parameters. The analyzing most refers to the two main principles of harmonization and billing on the fiscal system and the ways how to restructures the system in order to minimize the fiscal evasion.

Keywords: value added tax, revenues, complexity, legal uncertainty

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Authors: Hamidou Diallo, Marianne Guille

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This paper identifies leading triggers of deficient episodes in terms of GDP growth based on a sample of countries at different stages of development over 1994-2017. Using logit models, we build early warning systems (EWS), and our results show important differences between developing countries (DCs) and advanced economies (AEs). For AEs, the main predictors of the probability of entering in a GDP growth deficient episode are the deterioration of external imbalances and the vulnerability of fiscal position while DCs face different challenges that need to be considered. The key indicators for them are first, the low ability to pay their debts, and second, their belonging or not to a common currency area. We also build homogeneous pools of countries inside AEs and DCs. The evolution of the proportion of AE countries in the riskiest pool is marked first, by three distinct peaks just after the high-tech bubble burst, the global financial crisis, and the European sovereign debt crisis, and second by a very low minimum level in 2006 and 2007. In contrast, the situation of DCs is characterized first by the relative stability of this proportion and then by an upward trend from 2006, that can be explained by a more unfavorable socio-political environment leading to shortcomings in the fiscal consolidation.

Keywords: currency area, early warning system, external imbalances, fiscal vulnerability, GDP growth, public debt

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Authors: Ali Asghar Sotoudeh

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Since the US invasion of Iraq in 2003 and the subsequent regime change, internal conflicts between political and ethnic-religious groups have become a hallmark of Iraqi political dynamism. The most important manifestations of these conflicts are the Kurdish-central government conflicts, as well as fundamentalism since 2003. As a result, it seems not only US presence in Iraq under the pretext of fighting terrorism and expanding democracy has not had a positive effect on controlling fundamentalism and political stability in Iraq, but it has paved the way for the formation and continuation of geopolitical crises in the form of disputes over territory and sources of power. In this regard, given the importance of the study, the main purpose of this study is to examine the process of the impact of US regime-change policy on the formation and continuation of geopolitical crises in Iraq. The central question of this study is, what effect has the US regime change policy had on Iraq's domestic political processes? Findings show that regime change and subsequent imposed federalism have widened the gaps in Iraq's sectarian-ethnic system. As a result, the geopolitical crisis in the context of the dispute over geographical territory and sources of power between ethnic-religious groups has become the most important political dynamic in Iraq since the occupation. The research method in this article is descriptive-analytical, and the data collection method is library and internet resources.

Keywords: Iraq, united states, geopolitical crisis, ethno-religious conflict, political federalism

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Authors: Nazira Kakulia

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The analysis of transformation of institutional changes outlines two important characteristics. These are: the speed of the changes and their sequence. Successful transformation must be carried out in three different stages; On the first stage, macroeconomic stabilization must be achieved with the help of fiscal and monetary tools. Two-tier banking system should be established and the active functions of central bank should be replaced by the passive ones (reserve requirements and refinancing rate), together with the involvement growth of private sector. Fiscal policy by itself here means the creation of tax system which must replace previously existing direct state revenues; the share of subsidies in the state expenses must be reduced also. The second stage begins after reaching the macroeconomic stabilization at a time of change of formal institutes which must stimulate the private business. Corporate legislation creates a competitive environment at the market and the privatization of state companies takes place. Bankruptcy and contract law is created. he third stage is the most extended one, which means the formation of all state structures that is necessary for the further proper functioning of a market economy. These three stages about the cycle period of political and social transformation and the hierarchy of changes can also be grouped by the different methodology: on the first and the most short-term stage the transfer of power takes place. On the second stage institutions corresponding to new goal are created. The last phase of transformation is extended in time and it includes the infrastructural, socio-cultural and socio-structural changes. The main goal of this research is to explore and identify the features of such kind of models.

Keywords: competitive environment, fiscal policy, macroeconomic stabilization, tax system

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Authors: Rogerio Vieira Dos Reis

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Countries like Brazil that despite fighting hard against corruption are not improving their corruption perception, especially due to systemic political corruption, should review their corruption prevention strategies. This thesis brings a case study based on an alternative way of preventing corruption: addressing the corruption drivers in public policies that lead to poor economic performance. After discussing the Brazilian industrial policies adopted recently, especially the measures towards the automotive sector, two corruption issues in this sector are analyzed: facilitating payment for fiscal benefits and buying the extension of fiscal benefits. In-depth interviews conducted with a policymaker and an executive of the automobile sector provide insights for identifying three main corruption drivers: excessive and unnecessary bureaucracy, a complex tax system and the existence of a closed market without setting performance requirements to be achieved by the benefited firms. Both the identification of the drivers of successful industrial policies and the proposal of anti-corruption strategies to ensure developmental outcomes are based on the economic perspective of industrial policy advocated by developmental authors and on the successful South Korean economic development experience. Structural anti-corruption measures include tax reform, the regulation of lobbying and legislation to allow corporate political contribution. Besides improving policymakers’ technical capabilities, measures at the ministry level include redesigning the automotive regimes as long-term policies focused on national investment with simple and clear rules and making fiscal benefits conditional upon performance targets focused on suppliers. This case study is of broader interest because it recommends the importance of adapting performance audits conducted by anti-corruption agencies, to focus not only on the delivery of public services, but also on the identification of potentially highly damaging corruption drivers in public policies that grant fiscal benefits to achieve developmental outcomes.

Keywords: Brazilian automotive sector, corruption, economic development, industrial policy, Inovar-Auto

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Authors: O. Colot, M. Croquet, L. Cultrera, Y. Fandja Collince

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The objective of our research is to evaluate the impact of the allowance for corporate equity (ACE) on the financial structure of Belgian SME in order to highlight the potential existence of a fiscal leverage. To limit the biases linked to the rationing of the capital further to the financial crisis, we compare first the dynamic evolution of the financial structure of the Belgian firms over the period 2006-2015 by focusing on three sub-periods: 2006-2008, 2009-2012 and 2013-2015. We give then an international size to this comparison by including SMEs from countries adjoining Belgium (France, Germany, Netherlands and the United Kingdom) and within which there is no ACE. This comparison allows better understanding the fiscal advantage linked to the ACE of firms evolving in a relatively unstable economic environment further to the financial crisis of 2008. This research is relevant given the economic and political context in which Belgium operates and the very uncertain future of the Belgian ACE. The originality of this research is twofold: the long study period and the consideration of the effects of the financial and economic crisis on the financing structure of Belgian SMEs. The results of this research, even though they confirm the existence of a positive fiscal leverage for the tax deduction for venture capital on the financing structure of Belgian SMEs, do not allow the extent of this leverage to be clearly quantified. The comparative evolution of financing structures over the period 2006-2015 of Belgian, French, German, Dutch and English SMEs shows a strong similarity in the overall evolution of their financing.

Keywords: allowance for corporate equity, Belgium, financial structure, small and medium sized firms

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Authors: Ephraim Ugwu, Christopher Ehinomen

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Despite efforts by the Nigerian government to harmonize the macroeconomic policy implementations by establishing various committees to resolve disputes between the fiscal and monetary authorities, it is still evident that the federal government had continued its expansionary policy by increasing spending, thus creating huge budget deficit. This study evaluates the effect of macroeconomic policy coordination on economic growth uncertainty in Nigeria from 1980 to 2020. Employing the Auto regressive distributed lag (ARDL) bound testing procedures, the empirical results shows that the error correction term, ECM(-1), indicates a negative sign and is significant statistically with the t-statistic value of (-5.612882 ). Therefore, the gap between long run equilibrium value and the actual value of the dependent variable is corrected with speed of adjustment equal to 77% yearly. The long run coefficient results showed that the estimated coefficients of the intercept term indicates that other things remains the same (ceteris paribus), the economics growth uncertainty will continue reduce by 7.32%. The coefficient of the fiscal policy variable, PUBEXP, indicates a positive sign and significant statistically. This implies that as the government expenditure increases by 1%, economic growth uncertainty will increase by 1.67%. The coefficient of monetary policy variable MS also indicates a positive sign and insignificant statistically. The coefficients of merchandise trade variable, TRADE and exchange rate EXR show negative signs and significant statistically. This indicate that as the country’s merchandise trade and the rate of exchange increases by 1%, the economic growth uncertainty reduces by 0.38% and 0.06%, respectively. This study, therefore, advocate for proper coordination of monetary, fiscal and exchange rate policies in order to actualize the goal of achieving a stable economic growth.

Keywords: macroeconomic, policy coordination, growth uncertainty, ARDL, Nigeria

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Authors: Nino Pailodze, Malkhaz Sulashvili, Vladimer Kekenadze, Tea Khutsishvili, Irma Makharashvili, Aleksandre Kekenadze

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In the nearest future among the important problems which Georgia has solve the most important is economic stability, that bases on fiscal policy and the proper definition of the its directions. The main source of the Budget revenue is the national income. The State uses taxes, loans and emission in order to create national income, were the principal weapon are taxes. As well as fiscal function of the fulfillment of the budget, tax systems successfully implement economic and social development and the regulatory functions of foreign economic relations. A tax is a mandatory, unconditional monetary payment to the budget made by a taxpayer in accordance with this Code, based on the necessary, nonequivalent and gratuitous character of the payment. Taxes shall be national and local. National taxes shall be the taxes provided for under this Code, the payment of which is mandatory across the whole territory of Georgia. Local taxes shall be the taxes provided for under this Code, introduced by normative acts of local self-government representative authorities (within marginal rates), the payment of which is mandatory within the territory of the relevant self-governing unit. National taxes have the leading role in tax systems, but also the local taxes have an importance role in tax systems. Exactly in the means of local taxes, the most part of the budget is formatted. National taxes shall be: income tax, profit tax, value added tax (VAT), excise tax, import duty, property tax shall be a local tax The property tax is one of the significant taxes in Georgia. The paper deals with the taxation mechanism that has been operated in Georgia. The above mention has the great influence in financial accounting. While comparing foreign legislation towards Georgian legislation we discuss the opportunity of using their experience. Also, we suggested recommendations in order to improve the tax system in financial accounting. In addition to accounting, which is regulated according the International Accounting Standards we have tax accounting, which is regulated by the Tax Code, various legal orders / regulations of the Minister of Finance. The rules are controlled by the tax authority, Revenue Service. The tax burden from the tax values are directly related to expenditures of the state from the emergence of the first day. Fiscal policy of the state is as well as expenditure of the state and decisions of taxation. In order to get the best and the most effective mobilization of funds, Government’s primary task is to decide the kind of taxation rules. Tax function is to reveal the substance of the act. Taxes have the following functions: distribution or the fiscal function; Control and regulatory functions. Foreign tax systems evolved in the different economic, political and social conditions influence. The tax systems differ greatly from each other: taxes, their structure, typing means, rates, the different levels of fiscal authority, the tax base, the tax sphere of action, the tax breaks.

Keywords: international accounting standards, financial accounting, tax systems, financial obligations

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Authors: David P. Horton, Gary Lynch-Wood

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Western populations are aging, prone to various lifestyle health problems, and increasing their demand for health and social care services. This demand has created enormous fiscal and regulatory challenges. In response, government institutions have deployed strategies of behavior modification to encourage people to exercise greater personal responsibility over their health and care needs (i.e., welfare responsibilisation). Policy strategies are underpinned by the assumption that people if properly supported, will make better health and lifestyle selections. Not only does this absolve governments of the responsibility for meeting all health and care needs, but it also enables government institutions to assert fiscal control over welfare spending. Looking at the regulation of health and social care in the UK, the authors identify and outline a suite of regulatory tools that are designed to extract and manage the resources of health and social care services users and to encourage them to make (‘better’) use of these resources. This is important for our understanding of how health and social care regulation is responding to ongoing social and economic challenges. It is also important because there has been a failure to systematically examine the relevance of resources for regulation, which is surprising given that resources are crucial to how and whether regulation succeeds or fails. In particular, drawing from the regulatory welfare state concept, the authors analyse the key legal and regulatory changes and mechanisms that have been introduced since the 2008 financial crisis, focusing on critical measures such as the Health and Social Care Act and regulations introduced under the National Health Service Act. The authors show how three types of user resources (i.e., tangible, labor, and data) are being used to assert fiscal control and increase welfare responsibilisation. Amongst other things, the paper concludes that service users have become more than rule followers and targets of behavioral modification; rather, they are producers of resources that regulatory systems have come to rely on.

Keywords: health care, regulation, resources, social care

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Authors: Jeeban Amgain

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This paper investigates the impact of the size and composition of government expenditure and tax on GDP per capita growth in 36 Asian economies over the period of 1991-2012. The research employs the technique of panel regression; Fixed Effects and Generalized Method of Moments (GMM) as well as other statistical and descriptive approaches. The finding concludes that the size of government expenditure and tax revenue are generally low in this region. GDP per capita growth is strongly negative in response to Government expenditure, however, no significant relationship can be measured in case of size of taxation although it is positively correlated with economic growth. Panel regression of decomposed fiscal components also shows that the pattern of allocation of expenditure and taxation really matters on growth. Taxes on international trade and property have a significant positive impact on growth. In contrast, a major portion of expenditure, i.e. expenditure on general public services, health and education are found to have significant negative impact on growth, implying that government expenditures are not being productive in the Asian region for some reasons. Comparatively smaller and efficient government size would enhance the growth.

Keywords: government expenditure, tax, GDP per capita growth, composition

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Authors: Ahmad Javid Habib, Tetsuo Kidokoro

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There is an increasing demand for developing urban land to provide better living conditions for all citizens in Afghanistan. Most of the development will involve the acquisition of land. And the current land acquisition method practiced by central government is expropriation, which is a cash-based transaction method that imposes heavy fiscal burden on local municipalities and central government, and it does not protect ownership rights and social equity of landowners besides it relocates the urban poor to remote areas with limited access to jobs and public services. The questionnaire analysis, backed by observations of different case studies in countries where land readjustment is used as a collaborative land development tool indicates that the method plays a key role in valuing landowners’ rights, giving other community members and stakeholders the opportunity to collaboratively implement urban development projects. The practice of the method is reducing the heavy fiscal burden on the local and central governments and is a better option to deal with the current development challenges in Afghanistan.

Keywords: collaboration, land readjustment, master plan, expropriation

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Authors: Zintle Sikhunyana

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Management of public finance in many countries such as South Africa is affected by political decisions and by policies around fiscal decentralization amongst the government spheres. Economic success is said to be determined by efficient management of public finance and by the policies or strategies that are implemented to support efficient public finance management. Policymakers focus on pay attention to how economic policies have been implemented and how they are directed into ensuring stable development. This will allow policymakers to address economic challenges through the usage of fiscal policy parameters that are linked to the achieved rate of economic growth and development. Efficient public finance management reduces the likelihood of corruption and corruption is said to have negative effects on economic growth and development. Corruption in public finance refers to an act of using funds for personal benefits. To achieve macroeconomic objectives, governments make use of government expenditure and government expenditure is financed through tax revenue. The main aim of this paper is to investigate the potential impact of public finance management on economic growth and development in South Africa. The secondary data obtained from the South African Reserve Bank (SARB) and World Bank for 1980- 2020 has been utilized to achieve the research objectives. To test the impact of public finance management on economic growth and development, the study will use Seeming Unrelated Regression Equation (SURE) Modelling that allows researchers to model multiple equations with interdependent variables. The advantages of using SUR are that it efficiently allows estimation of relationships between variables by combining information on different equations and SUR test restrictions that involve parameters in different equations. The findings have shown that there is a positive relationship between efficient public finance management and economic growth/development. The findings also show that efficient public finance management has an indirect positive impact on economic growth and development. Corruption has a negative impact on economic growth and development. It results in an efficient allocation of government resources and thereby improves economic growth and development. The study recommends that governments who aim to stimulate economic growth and development should target and strengthen public finance management policies or strategies.

Keywords: corruption, economic growth, economic development, public finance management, fiscal decentralization

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Authors: Kwaku Damoah

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This paper presents a methodology and software application (App) designed to empower users in accessing, retrieving, and comparatively exploring data within the hierarchical network framework of the Government Finance Statistics (GFS) system. It explores the ease of navigating the GFS system and identifies the gaps filled by the new methodology and App. The GFS, embodies a complex Hierarchical Network Classification (HNC) structure, encapsulating institutional units, revenues, expenses, assets, liabilities, and economic activities. Navigating this structure demands specialized knowledge, experience, and skill, posing a significant challenge for effective analytics and fiscal policy decision-making. Many professionals encounter difficulties deciphering these classifications, hindering confident utilization of the system. This accessibility barrier obstructs a vast number of professionals, students, policymakers, and the public from leveraging the abundant data and information within the GFS. Leveraging R programming language, Data Science Analytics and Machine Learning, an efficient methodology enabling users to access, navigate, and conduct exploratory comparisons was developed. The machine learning Fiscal Analytics App (FLOWZZ) democratizes access to advanced analytics through its user-friendly interface, breaking down expertise barriers.

Keywords: data science, data wrangling, drilldown analytics, government finance statistics, hierarchical network classification, machine learning, web application.

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Authors: Michael W. Markowitz, Jeffrey Gingerich

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The landscape of higher education in the United States has undergone significant changes in the last 25 years. What was once a domain of competition among prospective students for a limited number of college and university seats has become a marketplace in which institutions vie for the enrollment of educational consumers. A central figure in this paradigm shift has been the Chief Academic Officer (CAO), whose institutional role has also evolved beyond academics to include such disparate responsibilities as strategic planning, fiscal oversight, student recruitment, fundraising and personnel management. This paper explores the scope and impact of this transition by, first, explaining its context: the intersection of key social, economic and political factors in neo-conservative, late 20th Century America that redefined the value and accountability of institutions of higher learning. This context, in turn, is shown to have redefined the role and function of the CAO from a traditional academic leader to one centered on the successful application of corporate principles of organizational and fiscal management. Information gathered from a number of sitting Provosts, Vice-Presidents of Academic Affairs and Deans of Faculty is presented to illustrate the parameters of this change, as well as the extent to which today’s academic officers feel prepared and equipped to fulfill this broader institutional role. The paper concludes with a discussion of the impact of this transition on the American academy and whether it serves as a portend of change to come in higher education systems around the globe.

Keywords: academic administration, higher education, leadership, organizational management

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Authors: Kemi Olalekan Oduntan

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Transformation is a strong word that portends a radical, structural and basic reappraisal of the basic assumptions that underline our economic reform and developmental efforts. The challenges before government are how to move the nation away from an oil-dominated economy, institute the basics for a private sector-driven economy, build the local economy on international best practices, transform a passive oil industry to a more pro-active one and reposition the country along the lines of a more decentralized federalism. But beyond this, Nigeria is faced with management and leadership challenges to contend with building an efficient and effective polity, inspiring a shared vision, remodeling a corrupt polity, redefining the essentials of transformational leadership and creating Nigerian dream that will inspire patriotism and commitment in the citizenry.

Keywords: economic, economic growth, patriotism, polity, transformational

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Authors: Mohammed Sani Abdulai

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Ghana’s Public Financial Management reforms have been going on for some two decades now (1997/98 to 2017/18). Given this long period of reforms, Ghana in 2019 is putting together both a Public Financial Management (PFM) strategy and a Ghana Integrated Financial Management Information System (GIFMIS) strategy for the next 5-years (2020-2024). The primary aim of these dual strategies is assisting the country in moving beyond reforms to consolidation and sustainability. In this paper we, first, examined the evolution of Ghana’s PFM reforms. We, secondly, reviewed the legal and institutional reforms undertaken to strengthen the country’s key PFM institutions. Thirdly, we summarized the strengths and weaknesses identified by the 2018 Public Expenditure and Financial Accountability (PEFA) assessment of Ghana’s PFM system relating to its macro-fiscal framework, budget preparation and approval, budget execution, accounting and fiscal reporting as well as external scrutiny and audit. We, finally, considered what the country should be doing to achieve its intended goal of PFM consolidation and sustainability. Using a qualitative method of review and analysis of existing documents, we, through this paper, brought to the fore the lessons that could be learnt by other developing countries from Ghana’s PFM reforms experiences. These lessons included the need to: (a) undergird any PFM reform with a comprehensive PFM reform strategy; (b) undertake a legal and institutional reforms of the key PFM institutions; (c) assess the strengths and weaknesses of those reforms using PFM performance evaluation tools such as PEFA framework; and (d) move beyond reforms to consolidation and sustainability.

Keywords: public financial management, public expenditure and financial accountability, reforms, consolidation, sustainability

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Authors: Risikat Oladoyin S. Dauda, Onyebuchi Iwegbu

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This study investigates the response of human development outcomes to selected macroeconomic indicators in Nigeria. Human development outcomes is measured by human development index while the selected macroeconomic variables are inflation rate, real interest rate, government capital expenditure, real exchange rate, current account balance, and savings. Structural Vector Autoregression (SVAR) technique is employed in examining the response of human development index to the macroeconomic shocks. The result from the forecast error variance decomposition and Impulse-Response analysis reveals that fiscal policy (government capital expenditure) shock is the greatest determinant of human development outcomes. This result reiterates the role which the government plays in improving the welfare of the citizenry. The fiscal policy tool is pivotal in human development which comes in the form of investment in education, health, housing, and infrastructure. Further conclusion drawn from this study is that human development outcome positively and significantly responds to shocks from real interest rate, a monetary policy transmission variable and is felt greatly in the short run period. The policy implication of this study is that if capital budget implementation falls below expectations, human development will be engendered. Hence, efforts should be made to ensure that full implementation and appraisal of government capital expenditure is taken sacrosanct as any shock from such plan, engenders human development outcome.

Keywords: human development outcome, macroeconomic outcomes, structural vector autoregression, SVAR

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Authors: Adeola Adenikinju, Olusanya E. Olubusoye, Lateef O. Akinpelu, Dilinna L. Nwobi

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Since the enactment of the Fiscal Responsibility Act (2007), the Federal Government of Nigeria (FGN) has made public its fiscal budget and the subsequent implementation report. A critical review of these documents shows significant variations in the five macroeconomic variables which are inputs in each Presidential budget; oil Production target (mbpd), oil price ($), Foreign exchange rate(N/$), and Gross Domestic Product growth rate (%) and inflation rate (%). This results in underperformance of the Federal budget expected output in terms of non-oil and oil revenue aggregates. This paper evaluates first the existing variance between budgeted and actuals, then the relationship and causality between the determinants of Federal fiscal budget assumptions, and finally the determinants of FGN’s Gross Oil Revenue. The paper employed the use of descriptive statistics, the Autoregressive distributed lag (ARDL) model, and a Profit oil probabilistic model to achieve these objectives. This model permits for both the static and dynamic effect(s) of the independent variable(s) on the dependent variable, unlike a static model that accounts for static or fixed effect(s) only. It offers a technique for checking the existence of a long-run relationship between variables, unlike other tests of cointegration, such as the Engle-Granger and Johansen tests, which consider only non-stationary series that are integrated of the same order. Finally, even with small sample size, the ARDL model is known to generate a valid result, for it is the dependent variable and is the explanatory variable. The results showed that there is a long-run relationship between oil revenue as a proxy for budget performance and its determinants; oil price, produced oil quantity, and foreign exchange rate. There is a short-run relationship between oil revenue and its determinants; oil price, produced oil quantity, and foreign exchange rate. There is a long-run relationship between non-oil revenue and its determinants; inflation rate, GDP growth rate, and foreign exchange rate. The grangers’ causality test results show that there is a mono-directional causality between oil revenue and its determinants. The Federal budget assumptions only explain 68% of oil revenue and 62% of non-oil revenue. There is a mono-directional causality between non-oil revenue and its determinants. The Profit oil Model describes production sharing contracts, joint ventures, and modified carrying arrangements as the greatest contributors to FGN’s gross oil revenue. This provides empirical justification for the selected macroeconomic variables used in the Federal budget design and performance evaluation. The research recommends other variables, debt and money supply, be included in the Federal budget design to explain the Federal budget revenue performance further.

Keywords: ARDL, budget performance, oil price, oil quantity, oil revenue

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Authors: Gordana Kordić, Petra Palić

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The European countries that during the past two decades based their exchange rate regimes on currency board arrangement (CBA) are usually analysed from the perspective of corner solution choice’s stabilisation effects. There is an open discussion on the positive and negative background of a strict exchange rate regime choice, although it should be seen as part of the transition process towards the monetary union membership. The focus of the paper is on the Baltic countries that after two decades of a rigid exchange rate arrangement and strongly influenced by global crisis are finishing their path towards the euro zone. Besides the stabilising capacity, the CBA is highly vulnerable regime, with limited developing potential. The rigidity of the exchange rate (and monetary) system, despite the ensured credibility, do not leave enough (or any) space for the adjustment and/or active crisis management. Still, the Baltics are in a process of recovery, with fiscal consolidation measures combined with (painful and politically unpopular) measures of internal devaluation. Today, two of them (Estonia and Latvia) are members of euro zone, fulfilling their ultimate transition targets, but de facto exchanging one fixed regime with another. The paper analyses the challenges for the CBA in unstable environment since the fixed regimes rely on imported stability and are sensitive to external shocks. With limited monetary instruments, these countries were oriented to the fiscal policies and used a combination of internal devaluation and tax policy measures. Despite their rather quick recovery, our second goal is to analyse the long term influence that the measures had on the national economy.

Keywords: currency board arrangement, internal devaluation, exchange rate regime, great recession

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Authors: Riddhi Shah

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Centre-state relations in India are a fascinating area of studies. The structure of the relationship has an effect on every single aspect of life as we know it in India. This paper is an attempt to study centre-state relations in the context of India’s maritime counter-terrorism strategy. Although the Government of India has not publicly stated its counter-terrorism strategy on the sea; intelligence, information sharing, crisis response, finances for internal security and the nation’s legislation for battling terrorism together comprise of India’s maritime-terrorism strategy. Through study of these areas, the paper argues that the centre-state divide has had systemic implications on India’s maritime security and has largely done more harm than good to collective initiatives that aspire to prevent future risk of terrorism from the sea or on the sea.

Keywords: counter-terrorism, maritime terrorism, India, federalism, centre-state relations

Procedia PDF Downloads 573