Research on the Efficiency of China’s Fiscal Expenditure Structure under the Goal of Inclusive Green Growth

Inclusive Green Growth is a sustainable development mode that pays attention to the coordinated growth of the economy, society, and ecology. With the intensification of the contradiction between fiscal revenue and expenditure, adopting the goal of adjusting the fiscal expenditure structure is conducive to improving the efficiency of fiscal funds. This paper establishes a theoretical model of the efficiency of the fiscal expenditure structure under the goal of Inclusive Green Growth, and on this basis, it constructs an index system of Inclusive Green Growth. Then, it applies a DEA-Malmquist model to analyze the efficiency of the fiscal expenditure structure. The results show that from 2007 to 2018, the growth rate of Inclusive Green Growth index showed a downward trend, which was mainly due to the decline in the growth rate of economic development. It rebounded after 2016, and the growth of the inclusiveness level played a major role. In time and space, the development resources tend to the unbalanced development trend of the eastern region; the average total factor productivity of the fiscal expenditure structure in space is the lowest in the east. The fiscal expenditure should be inclined to social expenditure and green expenditure, the western region should be inclined to economic expenditure, and the allocation of the expenditure structure in the central region should imitate the high-efficiency areas. In order to achieve the comprehensive development goal, this paper provides an analytical idea for the adjustment of the fiscal expenditure structure.

Public education expenditure and economic growth: based on panel data from 2009 to 2019 in China

Public education expenditure is the largest public expenditure and the foundation of education development in China. This paper uses Cobb-Douglas production function model to analyze the relationship between public education expenditure and China's economic growth, and explores the impact of the proportion of public education expenditure in primary, secondary and tertiary education expenditure on economic growth. The results show that public education expenditure has a positive effect on economic growth, and that secondary education accounts for the largest contribution to economic growth, followed by higher education and primary education. The research results suggest that China should increase financial investment in education and optimize the expenditure structure of three-level education.

Institutional inertia, local leadership turnover, and changes in the structure of fiscal expenditure

Taking the perspective of local party and government leadership change and using L-kurtosis to analyze provincial panel data in China from 1996 to 2018, this article identifies the structural change pattern of fiscal expenditures. We find that economic construction, science, education, culture, and health expenditures conform to the punctuated equilibrium pattern, while public security expenditures conform to the gradualism pattern. For expenditures under the punctuated equilibrium pattern, the longer the current local leader’s tenure is, the greater the friction with institutional inertia, and the larger the deviation from the average expenditure structure during the previous local leader’s tenure; however, for expenditures under the gradualism pattern, the local leader factor does not have a significant effect. This article also discusses the motivations of new local leaders for adjusting their expenditure structure. In terms of the proportion of economic development expenditures, in targeting expenditures, new leaders are more likely to “strive for the upper ends of the country,” while the expenditures for science, education, culture, and health are targeted to “converge to the national average.”

Household expenditure on life and health insurance

The increasing wealth in society is accompanied by the growing demand for life and health insurance. In recent years, there has been a rising interest in insurance products offering consumers access to private healthcare facilities, which ensure shorter waiting times for an appointment with a specialist than in public facilities, as well as quick diagnosis and high quality of services. The aim of the study was to determine the level of health and life insurance expenditure in different household types. Their position in the overall household expenditure structure and in the expenditure on consumer goods and services has also been determined. In 2015–2019 the number of consumers purchasing health policies, both individual and institutional, has more than doubled and their spending on health insurance was 84% higher in 2019 than in 2015. The largest amount for the purchase of life and health insurance was allocated in the households consisting of white-collar workers (more than 131 PLN per person yearly), while the lowest in farmer households (more than 30 PLN per person yearly).

Deregulation and pricing of medical services: a policy experiment based in China

Background Price regulation is a common constraint in Chinese hospitals. Based on a policy experiment conducted in China on the price deregulation of private nonprofit hospitals, this study empirically examines the impact of medical service price regulation on the pricing of medical services by hospitals. Methods Using the claim data of insured inpatients residing in a major Chinese city for the period 2010–2015, this study constructs a DID (difference-in-differences) model to compare the impact of price deregulation on medical expenditure and expenditure structure between public and private nonprofit hospitals. Results The empirical results based on micro data reveal that, price deregulated significantly increased the total expenditure per inpatient visit by 10.5%. In the itemized expenditure, the diagnostic test and drug expenditure per inpatient visit of private nonprofit hospitals decreased significantly, whereas the physician service expenditure per inpatient visit increased significantly. For expenditure structure, the proportions of drug expenditure and diagnostic test expenditure per inpatient visit significantly decreased by 5.7 and 3.1%, respectively. Furthermore, this paper also found that hospitals had larger price changes for dominant diseases than for non-dominant diseases. Conclusions Under price regulation, medical service prices generally become lower than their costs. Therefore, after price deregulation, private nonprofit hospitals increase medical service prices above their cost and achieve the service premium increasing physician medical services. Further, although price deregulation causes patient expenditure to increase to a certain level, it optimizes the expenditure structure, as well.

The Changing Patterns of Consumers’ Behavior in China: A Comparison during and after the COVID-19 Pandemic

This paper has an opportunity to collect questionnaire-based data regarding respondents’ life choices in China at the peak of COVID-19 outbreak (i.e., around 9–11 March 2020) and in a relatively stable period where the national pandemic was over and the lockdown policy was halted (i.e., around 25–30 March 2020). Comparing respondents’ answers about their most fundamental aspects of life during and after the pandemic, including income level, expenditure structure and level, purchase method, study method, food price and quality, and dining habit, both the descriptive and econometric models reveal that Chinese consumers’ life patterns were not significantly changed. These findings may imply a “new normal” where consumers stick to their new living habits that were forged during the pandemic. Therefore, policy makers have to envisage such an implicative socio-economic change (cost) brought by the implementation of a lock down policy in a long run, in addition to direct and explicit economic losses. However, improving food quality and controlling food price appear to be the strong and stable safety signals to reassure consumers in this complicated environment.

CLUSTER ANALYSIS OF TERRITORIAL COMMUNITIES’ BUDGET EXPENDITURE STRUCTURE IN UKRAINE UNDER FISCAL EQUALIZATION

The national fiscal equalization mechanism currently in force in Ukraine functions according to the tax capability criterion based on local budget revenues from personal income taxation. Potential conflicts of interest are inherent to this criterion due to differences in full revenue structures of territorial communities’ budgets, as well as their public service capacity and capital endowment, so that local authorities may not be motivated enough to use central government transfers to stimulate wider demand for productive labor in the community. Based on the relative budget expenditure indicators for 872 Ukrainian territorial communities, according to the 2020 totals, five categories of expenditure structure were identified using k-means cluster analysis: 1) the share of administrative spending in general fund expenditure is between 30% and 50%, the share of capital expenditures is at most 25% of total budget expenditure; 2) the capital expenditure share is at least 20%; 3) the share of wages is at most 75% in general fund expenditure; 4) the administrative spending share is higher than 50%; 5) the administrative spending share is lower than 30%, capital expenditure does not exceed 20% of the total. Parameters were estimated for log-linear dependency between general fund revenues per capita and ratios of direct/reverse transfers from central government budget, within the identified clusters and the full sample. The results allow noticing that the dependency between the revenue values and transfer ratios is statistically weaker and less elastic for clusters 2 and 3. Besides, the cluster groups show the statistically significant difference in average population of the respective communities, with lower population in clusters 1 and 4, moderate in 2 and 5, and higher in cluster 3. The differences in expenditure structure between donors and recipients of the fiscal equalization mechanism are most evident in modestly populated communities, i.e. with approximately 10,000 populations (clusters 2 and 5), where the analysis reveals subsidizing of higher administrative expenditure and capital investment shares at the expense of communities with more efficient administration. The potential conflict of interest is further amplified by lower differentiation in transfer ratios of communities with lower wage share, which predominantly act as donors through reverse budget transfers (cluster 3), as well as of communities with high capital expense shares, which are predominantly recipients (cluster 2). The identified interests and issues of the communities constituting the expenditure structure clusters allow suggesting two model priorities for inter-municipal cooperation. The first one is common projects in public services provision between the modestly populated communities with high wage shares and unequal endowment in investment resources. The second one is the shared commercial use of resources in least financially capable communities, funded by donor communities with comparatively low wage share which, in their turn, would require further optimization of administrative expenditures to be able to implement the projects of this kind.

Globalization processes and their effects on the household economy

Research background: Globalization influences the behavior of all economic actors. The aim of the presented scientific article is to examine households and household economics, which is affected by current social and innovative changes. The role of households is very important in any economy, they support economic growth with their expenditures, and it depends not only on the growth rate of household consumption, but also on the large share of income of household expenditures. Purpose of the article: The authors in the scientific article will examine households and their decision-making processes, which mainly concern consumption, taking into account income, expenditure, structure, savings, indebtedness and income stratification in the context of maintaining the required quality of life. Methods: To meet the goal, we will use available data, we will use statistical methods to analyze, compare with each other and, based on the findings, propose the necessary measures. Findings & Value added: Globalization processes are part of us and must be accepted in order for households to be able to meet their needs. As their income in particular becomes important, it will be necessary to decide which group of expenditures the household will prefer in order to achieve them. So far, according to statistical data, a very low part of household expenditures went to education, although it is the higher educational level of household members that presupposes that the household will be able to adapt to the challenges of globalization.