• Economic Analysis
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• v.25 no.3
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• pp.100-137
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• 2019

In this study, I analyzed the effects of government spending on macro variables and on each industry by using a factor augmented vector autoregressive model (FAVAR) and 167 macro-variables in Korea since 2000. The results reveal that the effects of two types of government spending - government consumption and government investment - greatly differ, therefore it is better to consider the two types of spending separately for a more precise analysis. The stimulus effects of government consumption are clear, but those of government investment are not. In addition, the crowding-out effects of government spending take place through the current account deficit channel rather than the traditional crowding-out channel, reducing private consumption and investment. Both types of government spending show a positive effect on the construction industry. Also, an increase in government consumption stimulates output in various manufacturing and service sectors.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.10
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• pp.39-48
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• 2022

This research aims to investigate the application of Keynes's theory in Indonesia, particularly in solving unemployment and poverty problems through government spending, economic growth, and human resource capacity. The basic concepts of the Keynesian theory were used as a method, through which government spending was harnessed toward economic growth in reducing unemployment and poverty rate. The analytical materials used were panel data for the 2017-2021 period in Central Java, Indonesia. The analytical methodology used was a multiple regression experimental design in selecting the best model according to Keynes's theory, especially for overcoming formidable problems. The main results showed that large Government spending program is ineffective in encouraging pro-growth, pro-job, pro-poor, and pro-equity development policy strategies. The causes of this failure include the violation of Keynes' assumptions about rationality and the low quality of education investment, which do not encourage productive and innovative entrepreneurship, as well as self-employment opportunities. As a result, government spending, including subsidies and direct financial assistance, used to implement the macroeconomic monetary, unstructured, and fiscal policy system is insufficient to significantly reduce the enormous difficulties. The main research results confirm that human capital capacity is the key to mitigating and reducing unemployment and poverty.

• Asian Journal of Business Environment
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• v.7 no.4
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• pp.5-9
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• 2017

Purpose - Many countries rely on currency depreciation or debt-financed government spending to stimulate their economies. Currency depreciation tends to increase net exports and aggregate demand but reduce short-run aggregate supply due to higher import costs. Debt-financed government spending increases aggregate demand, but the crowding-out effect due to a higher real interest rate may reduce private spending and aggregate demand. Therefore, the net impact of currency depreciation or debt-financed government spending on equilibrium real GDP is unclear. Research design, data, and methodology - This paper examines potential impacts of real depreciation of the ringgit, more government debt as a percent of GDP and other relevant macroeconomic variables on aggregate output in Malaysia. Results - Applying the AD/AS model, this paper finds that aggregate output in Malaysia is positively associated with real appreciation during 2005.Q3-2010.Q3, real depreciation during 2010.Q4-2016.Q1, the debt-to-GDP ratio and the real stock price, negatively affected by the real lending rate and inflation expectations, and is not influenced by the real oil price. Conclusions - Real depreciation of the ringgit after 2010. Q3 or sustainable expansionary fiscal policy would be beneficial to the economy.

• Korean Journal of Social Welfare
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• v.59 no.1
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• pp.329-351
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• 2007

This study analyzes the changes in individual local government's social spending from 1995 to 2004 in South Korea. Using the pooled time-series and cross-sectional data of 226 basic-level local governments, the resulting analyses of an error correction model are very interesting: First, a rising local population led to an immediate increase in social spending; Secondly, local governments gradually increased social spending when the elderly ratio had been high, but the levels of social spending in the previous year and local economy related spending level had been low. Thirdly, there were no spending changes associated with local elections and partisan politics. Fourthly, both cooperative and competitive intergovernmental relations had the most significant effect on the social spending and reduced geographical disparities in the level of spending across localities. In conclusion, this study suggests that we establish a more comprehensive intergovernmental network which lead to territorial justice in social welfare.

• Journal of Intelligence and Information Systems
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• v.19 no.2
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• pp.141-156
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• 2013

Researchers in welfare services of local government in Korea have rather been on isolated issues as disables, childcare, aging phenomenon, etc. (Kang, 2004; Jung et al., 2009). Lately, local officials, yet, realize that they need more comprehensive welfare services for all residents, not just for above-mentioned focused groups. Still cases dealt with focused group approach have been a main research stream due to various reason(Jung et al., 2009; Lee, 2009; Jang, 2011). Social Security Information System is an information system that comprehensively manages 292 welfare benefits provided by 17 ministries and 40 thousand welfare services provided by 230 local authorities in Korea. The purpose of the system is to improve efficiency of social welfare delivery process. The study of local government expenditure has been on the rise over the last few decades after the restarting the local autonomy, but these studies have limitations on data collection. Measurement of a local government's welfare efforts(spending) has been primarily on expenditures or budget for an individual, set aside for welfare. This practice of using monetary value for an individual as a "proxy value" for welfare effort(spending) is based on the assumption that expenditure is directly linked to welfare efforts(Lee et al., 2007). This expenditure/budget approach commonly uses total welfare amount or percentage figure as dependent variables (Wildavsky, 1985; Lee et al., 2007; Kang, 2000). However, current practice of using actual amount being used or percentage figure as a dependent variable may have some limitation; since budget or expenditure is greatly influenced by the total budget of a local government, relying on such monetary value may create inflate or deflate the true "welfare effort" (Jang, 2012). In addition, government budget usually contain a large amount of administrative cost, i.e., salary, for local officials, which is highly unrelated to the actual welfare expenditure (Jang, 2011). This paper used local government welfare service data from the detailed data sets linked to the Social Security Information System. The purpose of this paper is to analyze the factors that affect social welfare spending of 230 local authorities in 2012. The paper applied multiple regression based model to analyze the pooled financial data from the system. Based on the regression analysis, the following factors affecting self-funded welfare spending were identified. In our research model, we use the welfare budget/total budget(%) of a local government as a true measurement for a local government's welfare effort(spending). Doing so, we exclude central government subsidies or support being used for local welfare service. It is because central government welfare support does not truly reflect the welfare efforts(spending) of a local. The dependent variable of this paper is the volume of the welfare spending and the independent variables of the model are comprised of three categories, in terms of socio-demographic perspectives, the local economy and the financial capacity of local government. This paper categorized local authorities into 3 groups, districts, and cities and suburb areas. The model used a dummy variable as the control variable (local political factor). This paper demonstrated that the volume of the welfare spending for the welfare services is commonly influenced by the ratio of welfare budget to total local budget, the population of infants, self-reliance ratio and the level of unemployment factor. Interestingly, the influential factors are different by the size of local government. Analysis of determinants of local government self-welfare spending, we found a significant effect of local Gov. Finance characteristic in degree of the local government's financial independence, financial independence rate, rate of social welfare budget, and regional economic in opening-to-application ratio, and sociology of population in rate of infants. The result means that local authorities should have differentiated welfare strategies according to their conditions and circumstances. There is a meaning that this paper has successfully proven the significant factors influencing welfare spending of local government in Korea.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.43 no.3
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• pp.204-215
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• 2020

Efforts on the continued increase of local government's fiscal spending related to improving the residential environment are desirable to counter the declining phenomenon of urban decline. At the same time, however, it is also important to know how to operate limited finances more efficiently to improve the residential environment. This study aims to contribute to the rational allocation of fiscal expenditure and the creation of productive results for the improvement of the settlement environment. To this end, this study analyzed the efficiency of financial expenditure related to the improvement of the residential environment in 225 local governments nationwide. The relationship between financial expenditure and residential environmental performance was also measured and the CCR, BCC and SBM models were used to measure efficiency. The analysis showed that most local governments need to scale back their fiscal spending related to improving the government environment. In addition, it was required to prepare feasible spending plans by bench-marking the processes of residential environment improvement projects in areas such as Haman-gun, Jongno-gu, Seoul, and Seocho-gu, which are considered to be under efficient operation.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.2
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• pp.71-79
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• 2022

The aim of this study is to see how government spending on education, health, and social security affects ratios in Indonesia. The third sector has a critical role to play in reducing the dependency ratio. It also aims to lower unemployment and poverty rates. This study uses the GMM panel data model. This model can determine the dynamic response of the ratio that comes from a number of variables. This study uses data from 33 provinces from 2010 to 2018. The results show that government spending in the education and health sectors has a positive effect on the dependency ratio, both in the short and long term. Social security has a significant effect on the dependency ratio in the long term, but not in the short term. Government spending in the education sector and health sector and social security sector have a positive and significant effect on disease and illness. The study's findings show a high level of poverty with a large standard deviation. The high ratio value is due to the large number of restrictions placed on a number of regions. Each province has made a significant contribution to overcoming these challenges, particularly in terms of the comparative ratio.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.7
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• pp.413-421
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• 2021

Government expenditure on education has attracted much attention because it plays an important role in the economic development. The question is whether government expenditure on education has a positive or negative impact on the economic growth and vice versa. This study aims to provide reliable estimates of the relationship between government expenditure on education and economic growth with empirical evidence in Vietnam for the period 2006-2019. The data was taken from the official statistics of the General Statistics Office of Vietnam. The authors have used the VAR model and Granger causal model to determine the relationship between government expenditure on education and the economic growth. Research results show that there is a two-way nexus between the economic growth and government spending on education with a lag of about two years. From the results obtained from this research, the authors have made some policy suggestions for the Vietnamese government as how to increase investment for education. If there is a one-way causal relationship between expenditure on education and the economic growth, the government can use spending as a growth factor. However, if there is a bi-directional relationship between the government expenditure on education and the GDP growth, the government needs to ensure that resources are appropriately managed and allocated effectively to promote growth.

• 한국사회정책
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• v.23 no.1
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• pp.257-285
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• 2016

The purpose of this paper is to examine the determinants of public attitudes toward welfare spending in relation with the perception of welfare level. Data from the national survey of 'the SSK Good Government Research Unit' are used to perform a logistic regression analysis of the association between welfare attitudes and government perceptions, political orientations, and socio-economic backgrounds. The most prominent finding is that the determinants of welfare attitudes differ markedly between the two different groups of welfare perception. The empirical results say that persons living in a corrupt government tend to prefer welfare spendings despite having low level of welfare, and persons living in a unjust government tend to prefer welfare expansion because welfare level must be low. Persons living in a government of great capacity tend to have positive attitudes to welfare spending despite having a high level of welfare, whereas persons living in a government of less capacity tend to have negative attitudes to welfare expansion because the level of welfare is too high beyond government capacity. This distinction between the two perceptions of welfare level provides a systemic understanding of public attitudes toward welfare spending.

• The Journal of Asian Finance, Economics and Business
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• v.9 no.6
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• pp.245-252
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• 2022

This study examines the strength of the impact of fiscal policy tools on economic wellbeing as measured by per capita income in Malaysia from 1996 to 2020. The impact of fiscal policy instruments on economic wellness, represented by real income per capita, is measured using the autoregressive distributed lags model. The speed of adjustment from short-run disequilibrium to long-run equilibrium is also measured to assess the strength of the fiscal instruments' impact on per capita income. Empirical results exhibit the existence of co-integration relationships between per capita income, tax revenue, and government spending. The findings provide strong support for the presence of a long-run positive impact on government spending and a long-run negative impact of tax revenue on per capita income. The coefficient of ECT_t-1 indicates that deviations from a short-run disequilibrium to a long-run equilibrium from the current to the future period are corrected with a speed of 76% (equivalent to a duration of 1.5-2 years to return to equilibrium). The practical and policy implication of the results is fiscal instruments play a significant role, mainly in alleviating the economic impact of the COVID-19 pandemic in the long run.