Fiscal Decentralization and Fiscal Multiplier in China

A fundamental aspect of China’s transition to a market economy is the change in fiscal decentralization marked by the tax reform in 1993. This paper examines the effect of revenue and expenditure decentralization and their divergences on fiscal spending multipliers in China using nationally aggregate and provincial-level data from 1978 to 2017. Our investigations show that expenditure decentralization weakens the efficacy of spending policies, while revenue decentralization enhances the efficacy. Moreover, the divergence of revenue and expenditure decentralization has significantly decreased the provincial spending multiplier, while its effect on the aggregate spending multiplier is insignificant. The provincial results are robust to the inclusion of off-budgetary expenditure and revenue, using different estimates of multipliers and different measures of fiscal decentralization, considering from a long-run perspective, and addressing the endogeneity issue.

BUDGETARY EXPENDITURE: PROBLEMS OF INHOMOGENEITY IN THE REGIONS OF RUSSIA

The state, as a system, presupposes the homogeneity of the economic space, which also applies to budget expenditures per capita in each region. Russia is distinguished by extremely uneven size of the regional budget, which, according to the authors, poses a threat to the integrity of the economic space and hinders economic growth in general. The aim of the study is to show the heterogeneity of Russian regions in terms of the level of budget expenditures per capita. The work investigated the ongoing processes of convergence and divergence in terms of the level of regional budgetary expenditures. Standard deviation and coefficient of variation were used as a tool to measure the level of convergence. In the course of the study, distinct convergence processes were identified until 2013, and then the termination of these processes. The processes of regional convergence require more active government action in the redistribution of budgetary funds, which was possible before the onset of the financial crisis and general stagnation processes that have been observed in the economy after 2012. The task of the state at this stage is to overcome regional differences in the provision of the basic needs of the inhabitants of the regions (education, medicine, housing conditions).

Administrative Costs and Tariff Rates in the Presence of Customs Evasion: Evidence from Ecuador

This paper seeks to assess the effectiveness of customs policies in increasing the resources devoted to controlling and inspection. Specifically, it seeks to analyze whether an increase in the administrative cost of collecting taxes on foreign trade in Ecuador contributes to reducing customs fraud. To this end, we identify and estimate a transfer function model (ARIMAX), considering information on foreign trade such as official international trade statistics report and tariff rates, as well as the execution of budgetary expenditure and Ecuador’s gross domestic product (GDP). The period under study includes quarterly series from 2006 to 2018. The results obtained by the model indicate that allocating greater material and budgetary resources to combat customs fraud does not always achieve the objective of reducing customs evasion.

Concept and purpose of expenditure obligations

One of the topical problematic issues in financial law is the definition of the meaningful characteristics of expenditure obligations in the budget structure. Not only in civil relations there are obligations, they are also characteristic of the public law sphere within the framework of different types of financial obligations: public, budgetary, expenditure, cash, debt. Expenditure obligations are legislatively enshrined in the Budget Code of the Russian Federation, and provide for the obligations of the relevant public law entity to provide funds from the relevant budget to the entity specified in the legislation (natural or legal entity, public entity). An analysis of the content characteristics of expenditure obligations indicates the presence of general and specific signs of civil and expenditure obligations. Among the first, it is necessary to highlight the property nature, the presence of legal relations, and the specific ones include the grounds for the emergence of obligations, their nature.

Do Business Administration degrees encourage entrepreneurship and strengthen connection with business incubators?

Purpose First, this paper aims to study the extent to which students in business administration degrees are aware of the characteristics of the business ecosystem. Second, the degree of knowledge of the benefits resulting from the interaction between the university-based business incubators and the universities are studied. Design/methodology/approach To focus the discussion, a survey is conducted, asking students their preferences as future professionals, as well as their knowledge about specific sources of financing, namely, venture capital and crowdfunding and other networks useful to foster the creation of companies such as business incubators. Findings Results reveal that the students under study mostly prefer to work as employees in a company. Additionally, these results suggest a poor knowledge from students regarding specific aspects related to entrepreneurship and, more specifically, business incubators. These empirical results underline the need to shift the focus of subject programmes towards a greater focus on entrepreneurship. Additionally, the results also draw attention to the need of fostering the relationship between business incubators and universities, so that students become aware of the support that these networks can provide to entrepreneurs in the early stages of business projects. Research limitations/implications The data analysis for this study is built based on a survey of students attending specific finance courses at a Spanish public university. It is worth noting that in this study we have based on the supply side whereby future research might focus on the point of view given by the firm’s recruitment of business administration students. In addition, to strengthen the conclusions drawn from this study, further research should increase the sample period and the outcomes achieved at other universities in different regions. Practical implications In terms of policy implications, the empirical findings highlight the relevance of understanding the effectiveness of entrepreneurship programmes, given the budgetary expenditure involved in entrepreneurship education. Originality/value The relevance of the issue has been highlighted through a literature review of the past 10 years. In terms of policy implications, the empirical findings highlight the relevance of understanding the effectiveness of entrepreneurship programmes, given the budgetary expenditure involved in entrepreneurship education.

Issues arising from the low efficiency of the mechanism for the State to provide the budgetary finance to heavily subsidized regions of the Russian Federation

Subject. Despite the macroeconomic stability, the rate of economic growth is still low. Seventy two constituent entities of the Russian Federation need governmental subsidies, with six of them being highly subsidized. Moreover, the government allocates substantial funds to subnational transfers. Objectives. The study aims to determine what causes the low efficiency of the governmental subsidizing mechanism for highly subsidized regions. We also try to find how the situation can be improved. Methods. We applied methods of logic and statistical analysis. Results. We found that highly subsidized regions are not motivated to effectively utilize fiscal funds and find their own sources of finance. The article also indicates weaknesses and inaccuracies of fiscal forecasts and planning, including fiscal potential assessment techniques. There are no clear mechanisms incentivizing the regions to increment their financial potential. We also should note the clinging behavior and excessive centralization of the fiscal system. Conclusions and Relevance. The fact that the Russian fiscal practice predominantly depends on subsidies is caused by geographical, resource, socioeconomic, political and fiscal issues. As for highly subsidized regions, the modern subsidizing mechanism is insufficiently effective, since the regions are not motivated to effectively use the fiscal subsidies and find their own financial resources, and do not have appropriate levers to regulate and increment their financial potential. To eliminate this, they should expand financial opportunities and responsibility of regions as part of their economic policy. The economic policy should encourage innovation and harmonize the regional budgetary and fiscal policy. It is reasonable to cover more aspects for the assessment of the fiscal potential index, including fiscal expenditures of regions and their efficiency, improving the existing approaches to estimating expenditure commitments of the regions, using the model budget and proliferating the practice of budgetary expenditure reviews.

Centralised versus decentralised subnational debt and soft budget constraint: evidence from China

This article examines the causal effect of debt decentralisation on the budget constraint of subnational governments. China’s debt decentralisation reform of 2011 authorised four provincial-level units to issue debt on their own, but not the remaining ones. Using data on the budgetary expenditure and revenue of Chinese subnational governments from 2009 to 2014, we estimate the effect of the reform with a difference-in-differences approach, with those four provincial units as the treatment group and the others as the control group. Our findings suggest that debt decentralisation can help harden the budget constraint of subnational governments.

ECONOMIC AND STATISTICAL ASSESSMENT OF BUDGET MANAGEMENT EFFECTIVENESS IN PLANNING AND USING BUDGETARY EXPENDITURE

Introduction. The question of justification of optimal and efficient methods and tools of effective budgetary management is important when planning and using budget funds. At the same time, world experience does not give universal decisions on its organization and evaluation, since there are inherent budgetary structure and peculiarities of budget system building in each country. There is an urgent need to develop a system of indicators that can be used to assess the budget management effectiveness at the appropriate stage of the budget process. The purpose of the article is to develop indicators for evaluating the budget management effectiveness in planning and using budget funds on the basis of target and process approaches. Results. It is substantiated that, despite the importance of building an effective management system in the budgetary sphere, the issue of evaluating the budgetary management effectiveness in the planning and using of budgetary funds has not been properly developed. The list of indicators of budgetary management effectiveness at planning and using of budgetary means is offered and calculated in the context of target and process approaches. The integral performance index of budgetary management was calculated, which made it possible to distinguish the performance zones (critical, lower than average, medium, high). The conceptual and categorical apparatus of the economics theory and financial management has been further developed in order to clarify the meaningful content of the concepts of "target budget management effectiveness", "process budget management effectiveness", "overall budget management effectiveness". Conclusions. Thus, having conducted the research we were able to distinguish the indicators and, on their basis, to calculate an integral indicator of the budget management effectiveness in the planning and using of budget funds. Such calculations are based on targeted and process approaches, which allowed to determine the efficiency indexes of income planning, achievement of planned expenditures, rhythmic execution of income, the degree of uniformity of expenditures. Keywords: management system, effectiveness, budget, revenues, budget management, expenditures, planning, budgetary funds.

EXPENDITURE ON ASIF IN THE YEARS 1991-2018 AS AN EXAMPLE OF THE REDISTRIBUTIVE FUNCTION OF POLAND’S AGRICULTURAL BUDGET

The aim of the paper was to indicate the size of expenditure on the Agricultural Social Insurance Fund (ASIF) on the background of changes that occurred in the agricultural budget, state budget and GDP in almost the entire period of adjustment of the Polish economy to market conditions. This period covers the years 1991-2018 and concerns budgetary expenditure supplementing the deficit, in particular the Pension Fund of ASIF as an example of the implementation of the redistributive function of the state budget. The study covered the share of expenditure on the agricultural sector in the total expenditure of the state budget and in the developed Gross Domestic Product, as a reference to the economic situation in the economy. The analyses showed that the share of budgetary expenditure on rural areas, agriculture and agricultural markets, in the analysed period, increased significantly after Poland’s integration with the EU, which primarily constituted a pro-development impulse. Expenditure on ASIF benefits, in a way, reflect the satisfaction of social needs related to rural areas and agriculture. The share of social expenditure (on ASIF) in total state budget expenditure decreased at the same time. However, it is noticeable that the nominal volume of these expenditures slightly increased in relation to the stabilised level (ca. PLN 17.5 billion) from past years. The authors believe that this amount should not be lower, because the social insurance system of farmers has been effectively “sealed” and additionally there is an increase in pension ben

STATE FISCAL SPACE RESEARCH FORMATION IN THE CONTEXT OF SUSTAINABLE DEVELOPMENT

The scientific objective of the research is to carry out the country's fiscal space for the study of public finance policy affects the context of sustainable development. The selection and topicality of the research issue is justified by the fact that each country's sustainable development is affected by the government's policies. One of its main components is fiscal or budgetary policy. Traditionally, it is defined as the money required for setting revenue and expenditure policy that is needed to ensure the government operation, but the economic interpretation says it is the economy regulation system through taxes and government spending. It is emphasized that it is closely linked with the state's role in the redistribution of society profits, determining the state budget's proportion in the gross domestic product, defining objectives for the common tax burden, budgetary expenditure, allowable deficit, volume, and structure of the government debt. In addition, the concept of “fiscal space” correlating with application of the fiscal policy measures becomes topical. Thus, the government is able to influence income of both the society generally and certain groups of residents, their purchasing power and impact on economic development in general. It defines the need of concept fiscal space.