Please read the abstract in the dissertation. Copyright / Dissertation (MCom)--University of Pretoria, 2008. / Economics / unrestricted

In this thesis, the response of a provincial government's budgetary decisions with respect to changes in Federal conditional and unconditional grants was investigated with special reference to whether or not the responses of a high income province (Ontario) differed from those of a low income province (New Brunswick). In order to facilitate the analysis, a theoretical framework (called Model I) was set forth in which a province's expenditure and tax responses to changes in net provincial product and Federal grants could be derived. Using this framework, separate equations were estimated for Ontario and for New Brunswick for those expenditures aided by the National Health Grant Program, the Trans-Canada Highway Program, the Hospital Insurance and Diagnostic Services Program, and the categorical welfare programs and the Canada Assistance Plan; and for other aided expenditures, unaided expenditures, and revenue. Since expenditure data were not available according to the definitions required for Model I, separate expenditure equations could not be estimated, within the context of Model I, for education, fish and game, forest~ and lands (settlement and agriculture). Thus, an alternative framework (called Model II) was developed. In Model II, these data difficulties were taken into account through a reformulation of the province's quadratic utility function; this allowed the magnitude of the conditional and unconditional grant coefficients to be derived and interpreted prior to estimation. Nine expenditure equations and one revenue equation were estimated for Ontario and for New Brunswick within the framework of Model II. The major difference between the dependent variables used in Model I and Medel II is that in the latter the dependent expenditure variable for each program area considered separately allows the inclusion of expenditures which may be both aided and unaided whereas in Model I the dependent variable for programs considered separately properly includes expenditures only on those goods and services which are specifically aided by federal conditional grants. On the basis of the empirical estimates of Models I and II, the following conclusions may be drawn: first, Ontario and New Brunswick do not appear to respond to changes in Federal conditional and unconditional grants in the same manner. For example, the empirical estimates of Model I reveal that only New Brunswick's expenditures responded as predicted to the receipt of Federal limited conditional grants in the three limited grant programs considered separately, namely, the General Health Grants' Program, hospital construction, and the Trans-Canada Highway. On the other hand, the empirical estimates of Model II indicate that Federal conditional grants for hospital construction, hospital insurance and diagnostic services, social welfare, and lands (settlement and agriculture) stimulated both provinces' expenditures in these areas during the period from 1948 to 1970; and that Federal grants for the Trans-Canada Highway encouraged Ontario's total road expenditures while gr'-nts received under the General Health Grants' Progran and under the various forestry programs stimulated New Brunswick's expenditures on general and public health and on forests, respectively. With regard to unconditional grants, only Ontario's expenditures on education and New Brunswick's expenditures on lands (settlement and agriculture) were stimulated by their receipt. A second conclusion is that conditional grants stimulate spending on individual programs to a greater degree than do unconditional grants; and, third, unconditional grants are used as a substitute for own source revenue in the case of New Brunswick. In addition, the theoretical models' predictions that a province responds to the same extent to changes in net provincial product and unconditional federal grants is supported in the case of both Ontario and New Brunswick. / Thesis / Doctor of Philosophy (PhD)

This dissertation analyses the idea that parliament controls public money in parliamentary constitutional systems of government. That analysis proceeds through an historical and contemporary examination of the way legal practices distribute authority over public money between different institutions of government. The legislative and judicial practices concerning taxation, public expenditure, sovereign borrowing, and the government financing activities of central banks are selected for close attention. The contemporary analysis focuses on the design and operation of those legal practices in the United Kingdom and the Commonwealth of Australia, in the context of the boom-bust-recovery economic conditions experienced between 2005 and 2016. The dissertation's ultimate claims are explanatory: that "parliamentary control" is a poor explanation of the distribution of financial authority in parliamentary systems of government and should be jettisoned in favour of an idea of "parliamentary ratification". An empirically engaged methodology is adopted throughout the dissertation and (historical and contemporary) public sector financial data enrich the legal analysis. The dissertation acknowledges the impact of, but remains agnostic between, different economic and political perspectives on fiscal discipline and public financial administration. The dissertation makes a number of original contributions. It provides a detailed examination of the historical development, legal operation and constitutional significance of annual appropriation legislation, and the legal regimes governing sovereign borrowing and monetary finance. It also analyses the way that law interacts with government behaviour in situations of economic emergencies (focusing on the Bank of England's public financing activities since 2008), and the institutional and doctrinal obstacles facing judicial involvement in disputes concerning public finance (focusing on the Australian judiciary's recent engagements with public expenditure legislation).