Scaling behavior of public procurement activity

Public procurement refers to the purchase by public sector entities—such as government departments or local authorities—of Services, Goods, or Works. It accounts for a significant share of OECD countries’ expenditures. However, while governments are expected to execute them as efficiently as possible, there is a lack of methodologies for an adequate comparison of procurement activity between institutions at different scales, which represents a challenge for policymakers and academics. Here, we propose using methods borrowed from urban scaling laws literature to study public procurement activity among 278 Portuguese municipalities between 2011 and 2018. We find that public procurement expenditure scales sublinearly with population size, indicating an economy of scale for public spending as cities increase their population size. Moreover, when looking at the municipal Scale-Adjusted Indicators (the deviations from the scaling law) by contract categories—Works, Goods, and Services—we are able to identify a richer local characterisation of municipalities based on the similarity of procurement activity. These results make up a framework for quantitatively studying local public expenditure by enabling policymakers a more appropriate foundation for comparative analysis.

Correcting the Underestimation of Capital Incomes in Inequality Indicators: with an Application to the UK, 1997–2016

This paper proposes a methodological framework to better incorporate non-labour income into existing top adjusted indicators of economic inequality. Surveys are known to miss the rich, receiving disproportionate amounts of capital income. There has been a surge in top harmonisation methodologies, which complement survey-based estimates of inequality with information from the rich reported in tax administrative sources. These harmonisation methods are found to have a significant upward effect on inequality indicators. This analysis uses the Family Resources Survey (household survey) and the Survey of Personal Incomes (tax data) to explore the extent to which existing UK harmonisation methodology corrects for capital income. First, this analysis finds that the FRS has experienced a significant decline in capital income measurement over the past 20 years (1997–2016), taking reported levels of capital income in the SPI as benchmark. Second, the top harmonisation methodology is found to only partially correct for this decline. Third, in response, the paper proposes a multi-step capital income correction to allocate the remaining capital income missing from top adjusted inequality indicators. The adjustment accounts for both under-coverage and under-estimation error of capital income across the income distribution. Poor measurement of capital incomes in household surveys has long been acknowledged but attempts to correct for this have remained few. This paper highlights the need for decomposable top adjusted indicators of inequality to give a better picture of the role of capital incomes in driving inequality. Surveys are traditionally used to produce inequality indicators used by governments, statistical offices and policy makers. The policy implication is that income missing from indicators structurally falls out of inequality debates, which has arguably been the case for capital incomes.

Measuring and Analysing the Financial Performance of State-Owned Economic Entities

The experts of the State Audit Office of Hungary analysed financial performance measurement issues of state-owned companies (public companies) with the aim to apply the principle of performance as widely as possible during public money spending. In many respects, the same tools can be used to measure and analyze the performance of these companies as for private sector companies, however misrepresentations arising from public sector specialties must be filtered out. Therefore, an adjusted version of the financial indicators has been prepared, using corrective items specifically focusing public sector specificities. To test the adjusted indicators, we prepared an analysis for a group of 148 public companies, the main findings of which are presented in our article. The special conditions, operation or risks of state-owned companies may require different tools and priorities in terms of ownership control. In this article, we try to form relatively homogeneous groups, portfolios - based on adjusted financial indicators- which helps the owner to treat groups of companies differently according to financial capabilities and performance. Classification into groups can draw attention to critical management factors, risks, but also strengths as well. In this way, the development of portfolios can provide a good basis for effective ownership management of companies.

Climate Change in the Capital Markets: A Study of Actively Managed Green Bond Funds

In this study, we carried out a performance analysis of green bond portfolios available from public databases for the period between 2017 and 2020. The aim of our research was to obtain empirical proof for the existence of the green premium, which was confirmed by risk-adjusted indicators, i.e. the Sharpe ratio, the M2 ratio and the Sortino ratio. The green premium is the return differential that can be measured between green and conventional financial instruments. According to the literature, investors are willing to forego 1 to 9 basis points of their returns in the interests of financing climate targets, to cover the issuer’s extra costs incurred from green bond ratings and reporting obligations. Our results confirmed that the green bond portfolio underperforms benchmark indices by an average green premium of 2 basis points. We only found a single green bond fund that did not involve a green premium and was capable of achieving a risk-adjusted excess return. Nevertheless, it is noted that all of the indicators used showed that the average performance of green bonds improved steadily each year in the period under review.

Time-adjusted Analysis Shows Weak Associations Between BCG Vaccination Policy and COVID-19 Disease Progression

In this study, we ascertain the associations between BCG vaccination policies and progression of COVID-19 through analysis of various time-adjusted indicators either directly extracted from the incidence and death reports, or estimated as parameters of disease progression models. We observe weak correlation between BCG vaccination status and indicators related to disease reproduction characteristics. We did not find any associations with case fatality rates (CFR), but the differences in CFR estimates are at present likely dominated by differences in testing and case reporting between countries.

Az indikátoralapú teljesítményértékelésre épülő forráselosztás hatékonysága Magyarországon a felnőtteket ellátó háziorvosi praxisokban

Introduction: The indicator-based performance monitoring and pay-for-performance system for Hungarian primary care was established in 2009, covering the whole country. It is based on a stable legal system and well operating information technology. Although, the health insurance system is able to facilitate the performance improvement only by the financing for general medical practices, the many times modified present system does not take into consideration (apart from the geographical location of practices) factors which determine the performance but cannot be influenced by general practitioners. Aim: The study aimed at renewing the indicator set and evaluation methodology in order to enable the monitoring to evaluate the performance of general medical practices independent of their structural characteristics. Method: Each adult care specific primary care performance indicator from June 2016 covering the whole country has been investigated. Indicators adjusted for structural practice characteristics (age and gender of patients; relative education of people provided; settlement type and county of the practice) have been computed. The difference between adjusted indicators and national reference values has been evaluated by statistical testing. Appropriateness of the present monitoring and financing system has been investigated by comparing the practice level presently applied and adjusted indicators to outline the opportunities to develop the present system. Results: The present monitoring allocates 34.46% of pay-for-performance resources for improving the performance of practices. The majority of resources supports the conservation of performance. Furthermore, the present system is not able to identify each practice with better than reference performance, withholding amount corresponding to 8.83% of pay-for-performance resources. If this financing were restricted to practices with significantly better than reference performance, the maximum of the financing a month in a practice would increase from 176 042 HUF (551 EURO) to 406 604 HUF (1274 EURO). Conclusion: Completing the performance monitoring system operated at present by the National Health Insurance Fund of Hungary with indicators adjusted for structural characteristics of the general medical practices, the resource allocation effectiveness could be improved. Orv Hetil. 2019; 160(39): 1542–1553.