Air pollution and public finance: evidence for European countries

2019 ◽  
Vol 46 (7) ◽  
pp. 1398-1417 ◽  
Author(s):  
Maria Carratù ◽  
Bruno Chiarini ◽  
Antonella D’Agostino ◽  
Elisabetta Marzano ◽  
Andrea Regoli
Keyword(s):  
Public Finance ◽  
Air Pollution ◽  
Fiscal Policy ◽  
Environmental Quality ◽  
Public Debt ◽  
Environmental Performance ◽  
European Countries ◽  
Fiscal Consolidation ◽  
Trade Off ◽  
Content Type

Purpose The purpose of this paper is to investigate whether a statistically significant relationship exists between environmental quality, as measured by consumption-related air pollution, and public debt in Europe. In addition, since the debt burden is one of the most important indicators of fiscal soundness within the European Union (EU) Treaty and the subsequent fiscal compact, the authors propose a simple test to determine whether participation in EU Treaties has shaped the empirical relationship between fiscal policy/public debt and environmental performance. Design/methodology/approach To this end, the authors built a panel data set that covers 24 European countries over the period 1996–2015. Findings The aspect that the authors want to underline is a possible trade off, which is confirmed in the empirical analysis, between the public finance equilibrium and the maintenance of a public good such as air quality. However, there are important non-linearities that shape the interaction between public debt and environmental pollution. Similarly, threshold effects arise when the authors examine the interaction between EU regulation and public debt and when the authors separately examine high debt and low debt countries. When the authors account for the stabilization rules introduced by EU Treaties, a negative effect on pollution is evident; in this way, fiscal consolidation limits the positive effect of fiscal policy. Practical implications The results point out the existence of a potential trade-off between the role of EU as a regulator aiming to mitigate environmental pollution, and its role within the Stability and Growth Pact. The analysis highlights that fiscal consolidation policies, while facilitating the achievement of macroeconomic stability within EU, might have a negative side effect on the environment quality, which spreads beyond the borders of one single country. Originality/value While a number of studies have suggested that fiscal spending might contribute to the level of pollution in European countries, there is scant evidence of the effect of public debt on environmental performance. This lack of scientific knowledge is a serious shortcoming, since it may allow for an underrepresentation of the wide-ranging consequences of stabilization programmes targeting the debt-to-GDP ratio, which could affect environmental quality.

Government failures and non-performing loans in European countries: a spatial approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ferdinando Ofria ◽  
Massimo Mucciardi
Keyword(s):  
Public Debt ◽  
Geographically Weighted Regression ◽  
European Countries ◽  
Weighted Regression ◽  
Second Step ◽  
Ols Regression ◽  
Content Type ◽  
The Impact ◽  
The Relationship ◽  
The Eu

PurposeThe purpose is to analyze the spatially varying impacts of corruption and public debt as % of GDP (proxies of government failures) on non-performing loans (NPLs) in European countries; comparing two periods: one prior to the crisis of 2007 and another one after that. The authors first modeled the NPLs with an ordinary lest square (OLS) regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the authors utilized the geographically weighted regression (GWR) to explore regional variations in the relationship between NPLs and the proxies of “Government failures”.Design/methodology/approachThe authors first modeled the NPL with an OLS regression and found clear evidence of spatial instability in the distribution of the residuals. As a second step, the author utilized the Geographically Weighted Regression (GWR) (Fotheringham et al., 2002) to explore regional variations in the relationship between NPLs and proxies of “Government failures” (corruption and public debt as % of GDP).FindingsThe results confirm that corruption and public debt as % of GDP, after the crisis of 2007, have affected significantly on NPLs of the EU countries and the following countries neighboring the EU: Switzerland, Iceland, Norway, Montenegro, and Turkey.Originality/valueIn a spatial prospective, unprecedented in the literature, this research focused on the impact of corruption and public debt as % of GDP on NPLs in European countries. The positive correlation, as expected, between public debt and NPLs highlights that fiscal problems in Eurozone countries have led to an important rise of problem loans. The impact of institutional corruption on NPLs reports that the higher the corruption, the higher is the level of NPLs.

scholarly journals Effects of social, environmental, and institutional factors on sustainability report assurance: evidence from European countries

2020 ◽  
Vol 28 (6) ◽  
pp. 1059-1087 ◽  
Author(s):  
Lorenzo Simoni ◽  
Laura Bini ◽  
Marco Bellucci
Keyword(s):  
Business Ethics ◽  
Stakeholder Theory ◽  
Environmental Performance ◽  
Signaling Theory ◽  
European Countries ◽  
Institutional Factors ◽  
Legitimacy Theory ◽  
Content Type ◽  
Social Environmental ◽  
Sustainability Report

Purpose The purpose of this study is to extend existing knowledge on the determinants of sustainability report (SR) assurance practices. Four different theories – stakeholder theory, institutional theory, signaling theory and legitimacy theory – are used to formulate several hypotheses regarding the main factors that can influence a company’s decision to assure its SRs. Design/methodology/approach Using a sample of 417 listed organizations based in different European countries over five years, the effects of stakeholder commitment, country orientation toward sustainability, firm environmental performance and business ethics controversies on the decision to assure SRs are assessed. Findings The results show that a company’s decision to assure its SRs is motivated by the need to maintain good relations with its stakeholders (which is in line with stakeholder theory and legitimacy theory), as well as by the willingness to signal their sustainability performance (which is in line with signaling theory) and to gain legitimacy. On the contrary, business ethics controversies do not seem to be relevant to a company’s assurance practices. Originality/value This paper provides new insights into the influence that social, environmental and institutional factors have on assurance strategies. New factors that previous research does not investigate – environmental performance, business ethics controversies and corporate governance – are tested. Factors that are already investigated in the literature are considered from an original perspective of introducing alternative measures (e.g. for the scope of national sustainability policies).

scholarly journals Helpful Organizations: Membership in Inter-Governmental Organizations and Environmental Quality in Developing Countries

2011 ◽  
Vol 42 (2) ◽  
pp. 345-370 ◽  
Author(s):  
Gabriele Spilker
Keyword(s):  
Air Pollution ◽  
Developing Countries ◽  
Panel Data ◽  
Environmental Quality ◽  
Environmental Sustainability ◽  
Environmental Performance ◽  
Political System ◽  
General Idea ◽  
Intergovernmental Organizations ◽  
Governmental Organizations

Does membership in intergovernmental organizations help developing countries enhance their environmental performance? This article argues that IGO membership can improve the environmental performance of developing countries, by linking different issues, promoting the general idea of environmental sustainability and providing a channel through which these countries receive technologies and resources necessary to reduce pollution. This argument has been tested on panel data for 114 developing countries in 1970–2000. The results confirm that, controlling for a country's income and its political system, IGO membership is indeed associated with a reduction in both air pollution and greenhouse gases. To understand the mechanisms behind this result better, IGO membership is disaggregated according to both function and the degree of institutionalization of the respective organization.

The macroeconomic effects of fiscal consolidation policies in Greece

2017 ◽  
Vol 9 (1) ◽  
pp. 34-49 ◽  
Author(s):  
Stephanos Papadamou ◽  
Trifon Tzivinikos
Keyword(s):  
Fiscal Policy ◽  
Public Debt ◽  
Wage Policy ◽  
Government Consumption ◽  
Content Type ◽  
Indirect Taxes ◽  
Debt Dynamics ◽  
Policy Shocks ◽  
The Government ◽  
A Minor

Purpose This paper aims to investigate the effects of contractionary fiscal policy shocks on major Greek macroeconomic variables within a structural vector autoregression framework while accounting for debt dynamics. Design/methodology/approach The sign restriction approach is applied to identify a linear combination of government spending and government revenue shock simultaneously while accounting for debt dynamics. Additionally, output and unemployment responses to fiscal shocks under different scenarios concerning the amalgamation of austerity measures are considered. Findings The results indicate that a contractionary consumption policy shock, namely, a 1 per cent decrease in government consumption and a 1 per cent increase in indirect taxes, is preferred, as it produces a minor decrease in output and substantially decreases public debt, while a contractionary wage policy shock is suitable only when the government aims to sharply reduce public debt, as the consequences for the economy are harsh. A contractionary investment policy shock is not recommended, as it triggers a rise in unemployment and a fall in output, while the effect on the public debt is minor. Practical implications Policymakers should focus their efforts on reducing unproductive government consumption on the expenditure side. Concerning revenues, the reinforcement of tax administration is recommended to ensure that indirect taxes will be collected. Originality/value This paper contributes to the existing literature by providing a disaggregated analysis of the effects of fiscal policy actions in Greece by implementing several fiscal policy scenarios and accounting for the level of public debt. All scenarios are in the vein of the economic adjustment programs guidelines.

scholarly journals Fiscal Consolidation in the Course of Work Over Yearly Budget of State

2014 ◽  
Vol 5 (1) ◽  
pp. 27-42 ◽  
Author(s):  
Marta Postuła
Keyword(s):  
Public Finance ◽  
Fiscal Policy ◽  
Retrospective Analysis ◽  
Theoretical Studies ◽  
Fiscal Consolidation ◽  
State Budget ◽  
The Public ◽  
Finance Law

The need for sustaining of public finance stability is indicated as a key element of proper and effective, sound fiscal policy. Both revenues and expenditures are very strictly regulated by the public finance law provisions. Discussion conducted by experts concerning activities for consolidation in area of public finance very often focused on the substance of provisions of these basic acts of law. Retrospective analysis could lead to the conclusion (prove the thesis) that the importance of special law acts which are strictly functionally linked with state budget for particular budgetary year – to some extent – has not been adequately assessed and even noticed yet in theoretical studies. Due to above mentioned circumstances, in this article the changes in public finance law provisions were presented, which were implemented during procedures of preparation budgetary acts projects in the period 2009-2012, which confirm thesis formulated by the author. Article has an analytical character.

scholarly journals Imbalance of the public finance in the context of Keynesian and Non-Keynesian effects of fiscal policy limitation

2017 ◽  
Vol 3 (3) ◽  
pp. 27-32
Author(s):  
Joanna Stawska
Keyword(s):  
Public Finance ◽  
Economic Growth ◽  
Fiscal Policy ◽  
Public Debt ◽  
Statistical Data ◽  
Gdp Growth ◽  
The Public ◽  
Methods Of Analysis ◽  
Restrictive Policy

The purpose of this article is to point out the importance of the size of public debt and deficit in the context of Keynesian and non-Keynesian effects of fiscal policy limitation. To achieve this objective primarily were used methods of analysis of the available literature and presentation of statistical data. Considerations include, among others, the presentation of public debt and deficit in the context of economic growth. Expansionary fiscal policy often caused by economic fluctuations contributes to the deepening of public finance imbalance with frequent decline in GDP growth. The restrictive policy has an influence on improving the situation of the public finance sector in the long-term with at least moderate economic growth.

Empirical appraisal of fiscal stability: the case of Ghana

2015 ◽  
Vol 42 (5) ◽  
pp. 753-779
Author(s):  
Nana Kwame Akosah
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Fiscal Policy ◽  
Central Bank ◽  
Public Debt ◽  
Inflation Targeting ◽  
Fiscal Sustainability ◽  
Content Type ◽  
Quarterly Data ◽  
Poor Countries

Purpose – The purpose of this paper is to appraise the stability of Ghana’s fiscal policy by assessing government’s reaction in the past to rising public debt over the last three decades. Design/methodology/approach – Using quarterly data spanning 1990Q1-2013Q2, the study evaluated the mean reverting properties of Ghana’s public debt and also estimate the fiscal policy reaction function. The complementary estimation techniques include Pesaran et al. (2001) bound testing cointegration test, differencing method and also Granger two-step cointegration methods. Findings – Using quarterly data from 1990Q1 to 2013Q2, the study found the fiscal policy to be unstable in the 1990s, necessitating the adoption of Heavily Indebted Poor Countries’ initiative in 2001. The fiscal situation however relatively stabilizes afterwards following the external debt relief in 2001. Nevertheless, the study reveals that the recent fiscal policy (since 2006) seems to be confronted with tremendous fiscal pressures, exacerbated by fiscal excesses during election cycles as well as excessive domestic and external borrowings. In addition, the economic growth-debt link was found to be weak, though debt appears to adversely affect economic growth. Research limitations/implications – The study does not thoroughly explore the possibility of non-linear relationship between public debt and primary balance. Also, the result could be different using different data frequencies. Practical implications – The state of government finance has implications on the monetary policy and economic growth prospects of an economy. As an inflation targeting central bank since 2002, a successful monetary policy implementation that reins in inflation requires fiscal policy that curtails fiscal volatilities originating from imprudent behaviour of government. Therefore, the looming fiscal pressures in recent times would impair the effective implementation of the inflation targeting framework by the central bank, and also retard economic growth as the bulk of these expenditures are usually recurrent in the case of Ghana. Originality/value – This is the first paper to employ complementary econometric techniques to empirically evaluate fiscal sustainability in Ghana.

scholarly journals Fiscal stimuli and consolidation in emerging market economies

2018 ◽  
Vol 15 (4) ◽  
pp. 113-122 ◽  
Author(s):  
Igor Chugunov ◽  
Mykola Pasichnyi
Keyword(s):  
Fiscal Policy ◽  
Public Debt ◽  
Policy Design ◽  
Emerging Market ◽  
Policy Formulation ◽  
Emerging Market Economies ◽  
Fiscal Consolidation ◽  
Market Economies ◽  
Medium Level ◽  
The Government

The Great Recession has imposed vital limitations on the policy maker’s ability to react to further economic challenges. In this article, the authors set a purpose to assess the expediency and the size of fiscal consolidation or expansionary measures for countries with emerging markets depending on economic dynamics. The data on the episodes of large changes in fiscal policy, representing both fiscal stimuli and consolidation in Ukraine and in the EU countries with emerging market economies from 2001 to 2017, were evaluated. The authors examined the main reasons of fiscal policy’s volatility and its impact on economic growth. The countries with low and medium level of institutional framework for fiscal policy formulation could face permanent deficit and public debt problem. Episodes of expansionary fiscal adjustments based on government revenues cuts and spending increases were more effective compared with those that were entirely based on spending increases. Empirical investigation showed that successful fiscal consolidation measures obligatory included the government primary spending reduction. In those cases, the budget deficit-to-GDP and public debt-to-GDP ratios were declined. Medium-term priorities to develop the methodical bases of fiscal policy design were justified.

Policy asymmetries and fiscal sustainability: evidence from Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Opeoluwa Adeniyi Adeosun ◽  
Olumide Steven Ayodele ◽  
Olajide Clement Jongbo
Keyword(s):  
Fiscal Policy ◽  
Public Debt ◽  
Markov Switching ◽  
Fiscal Sustainability ◽  
Constant Parameter ◽  
Policy Rule ◽  
Content Type ◽  
Sustainability Analysis ◽  
Debt Dynamics ◽  
Fiscal Balance

PurposeThis study examines and compares different specifications of the fiscal policy rule in the fiscal sustainability analysis of Nigeria.Design/methodology/approachThis is methodologically achieved by estimating the baseline constant-parameter and Markov regime switching fiscal models. The asymmetric autoregressive distributed lag fiscal model is also employed to substantiate the differential responses of fiscal authorities to public debt.FindingsThe baseline constant-parameter fiscal model provides mixed results of sustainable and unsustainable fiscal policy. The inconclusiveness is adduced to instability in primary fiscal balance–public debt dynamics. This makes it necessary to capture regime switches in the fiscal policy rule. The Markov switching estimations show a protracted fiscal unsustainable regime that is inconsistent with the intertemporal budget constraint (IBC). The no-Ponzi game and debt stabilizing results of the Markov switching fiscal model further revealed that the transversality and debt stability conditions were not satisfied. Additional findings from the asymmetric autoregressive model estimation show that fiscal consolidation responses vary with contraction and expansion in output and spending, coupled with downturns and upturns in public debt dynamics in both the long and short run. These findings thus confirm the presence of asymmetries in the fiscal policy authorities' reactions to public debt. Further, additional evidences show the violation of the IBC which is exacerbated by the deleterious effect of the pro-cyclical fiscal policy response in boom on the improvement of the primary fiscal balance.Originality/valueThis study deviates from the extant literature by accommodating time variation, periodic switches and fiscal policy asymmetries in the fiscal sustainability analysis of Nigeria.

Economic growth in Spain is set to slow down

2016 ◽  
Keyword(s):  
Economic Growth ◽  
Interest Rates ◽  
Housing Market ◽  
Public Debt ◽  
Job Creation ◽  
European Countries ◽  
Medium Term ◽  
Content Type ◽  
Sustained Growth ◽  
Low Interest Rates

Significance Despite the absence of an effective government since December, the economy has maintained growth above an annualised 3%, higher than in most other Western European countries. Impacts Sustained growth will enable further job creation and reduce unemployment. Low interest rates and higher employment will support demand, especially in the housing market. Public debt will remain high in the short-to-medium term and the deficit will not be reduced to below 3% until 2018, dragging on growth. There is little macroeconomic space for further stimulus, although both the PP and Citizens have pledged to reduce taxes.

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