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The economics of government spending: an institutional approachMlilo, Mthokozisi 27 March 2019 (has links)
Thesis submitted in fulfilment of the requirements for the degree of Doctor of Philosophy,
in the Faculty of Commerce, Law and Management, School of Economic and Business Sciences. 27 March 2019 / This thesis investigates the role of institutional quality on the impact of government expenditure on economic performance. The thesis consists of five chapters. Chapter 1 provides an introduction of the thesis. Chapters 2, 3 and 4 are empirical chapters examining the role of institutions on the relationship between government expenditure and various indicators of economic performance. Chapter 5 concludes by giving policy recommendations.
In chapter 1 we provide a background, motivation, objectives, hypothesis to be tested, gaps in the literature, contributions of the study and the main findings. In chapter 2 we explore how institutional quality affects the government spending-output growth nexus. We estimate a modified growth accounting model found in Hansson and Henrekson (1994) and control for institutional quality by employing panel regression techniques on a panel of 71 countries over a period 1970-2015. Our main estimation technique, 3SLS with seemingly unrelated errors, is able to control for endogeneity and cross equation correlation. We find that the institutional quality variable has a mitigating effect on the relationship between government expenditure and output growth however, government expenditure generally has a negative and detrimental effect on output growth. This suggests that better institutional quality offsets the adverse effects of government expenditure. As such, there is a need to come up with policies that strengthen institutional quality and enhance the effectiveness of government expenditure programs.
Chapter 3 we examine the role of institutions on the optimal size of the government. The quadratic method of Armey (1995) and Scully (1994) method are employed on the country (time series regression) and group (panel data regression) estimations. Furthermore, we use the Hansen (1999) panel threshold regression technique to determine the presence of an optimal size and the values thereof. We ascertain that the majority of countries do have a significant optimal size of government. However, we note that the optimal size of government varies across countries and regions. Despite the presence of a non-linear relationship between government expenditure and output growth, there seems to be a marked difference between the size of government across levels of development and institutional arrangements. Countries with better institutions and higher levels of development seem to have a lower optimal level of government size. Perhaps, better institutions and higher levels of development help mitigate the adverse effects of government expenditure on output growth through the minimisation of the scope and scale of government activities, i.e., government size. Chapter 4 investigates the Twin Deficits Hypothesis (TWDH) and the role of institutional quality on a sample of 48 countries for the period 1995-2013. Using the national income accounting decomposition and the approaches in Feldstein and Horioka (1980) and Fidrmuc (2003) we investigate the role of institutional quality and capital mobility on the current account deficits and the government budget deficits (i.e., TWDH) nexus. We apply OLS, fixed effects, random effects regressions and panel cointegration techniques in our analysis. The results from the panel cointegration tests show that a long run relationship exists between the current account balance, investment and the government budget balance. The results reveal that current account deficits are mainly driven by private investment flows. However, we only find support for the Twin Deficits Hypothesis in a sample of developed countries and higher institutional quality countries. The results imply that governments of these countries enjoy financing from international sources and can easily finance their budget deficits without siphoning domestic savings away from investment. This result is unsurprising considering that capital seems to flow towards areas with perceived less risk. This suggests that current account deficits in developing countries are as a result of private agents’ decisions and not driven by government budget deficits. / PH2020
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The analytical and empirical appraisal of the Ricardian equivalence with reference to South Africa.Newport-Gwilt, Victoria Joan. January 1998 (has links)
The Government of National Unity, on coming into power in April, 1994, has endorsed the reconstruction and development programme (RDP) and its broad agenda for the rapid removal of the problems and gross inequality evident in all aspects of the South African society. Many economists argue that the sustain ability of the RDP, will depend crucially on the maintenance of fiscal discipline and the progressive reduction of the overall fiscal deficit. As excessive fiscal deficits are often associated with higher inflation, higher real interest rates, balance of payments disequilibrium and lower economic growth, thereby putting the RDP at jeopardy. The view based on the
Ricardian Equivalence approach however, takes the position that neither deficits nor the way they are financed, is as critical to economic policy and the future prosperity of an economy, as is generally believed. The Ricardian view consequently, argues that government need not necessarily embark on deficit reduction programmes as advocated by the so called traditional view. The study investigates the validity of the Ricardian view, both on the empirical and theoretical side, with special reference to the South African economy. The specific question that this study attempts to address is whether economic agents behave in a Ricardian manner in the South African economy. Our results (based on the replication of the Dalamagas (1994) study) could be very consequential for South African policy makers, as they suggest that the Ricardian Equivalence proposition is valid and therefore, government could on purely theoretical grounds shift its focus
away from the debt situation, and concentrate on the policies aimed to correct the inequalities (in wealth, distribution of public goods, employment opportunities) created by the Apartheid era. Whether government should do so in reality however is debateable due to the other considerations that government need to take account of when implementing actual macroeconomic policy. / Thesis (M.Soc.Sc.)-University of Natal, Pietermaritzburg, 1998.
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An appropriate financial management and budgeting system to support transition in South AfricaMdlazi, David Thembalikayise Francis 03 1900 (has links)
Thesis (MAdmin)--Stellenbosch University, 2000. / ENGLISH ABSTRACT: The study is devoted to the determination of an appropriate financial
management and budgeting system to support a transforming South Africa.
Given the challenges and opportunities presented by the new political
dispensation, both locally and abroad, the evolution of financial management
and budgeting systems is analysed. Specifically, elements of each budgetary
system that stood the test of time to the present, are studied.
International case studies of countries that have undergone (or are
undergoing) the transformation process successfully, or otherwise, are fully
discussed to serve as invaluable lessons and experience for South Africa on
its quest for a smooth and swift transformation, to prevent it from ending up
as just another unsuccessful transformation. This then serves as a broad
foundation for an appropriate financial management and budgeting system
which is proactive in the transformation process.
South Africa will not reinvent the wheel. Unlike other countries that waited for
transformation problems to fall upon them, the South African financial
management and budgeting system manipulates the financial management
policies. It achieves this by broadly defining the objectives to be achieved
through prioritisation and reprioritisation, formulate clear strategies for shortterm,
medium-term and long-term plans, goals, processes, functions and
activities.
It applies all the positive elements of input-orientated systems, activity/
performance measuring systems, objective/goal-orientated system, medium
term expenditure framework and multi-year budgets studied and drawn from
lessons and experience of other countries. South Africa's appropriate
financial management and budgeting system is a broad crosswalk model
vacillating between all systems from a broad definition of objectives, goals,
processes and activities ending up with a strong financial management tool. / AFRIKAANSE OPSOMMING: Dié studie word gewy aan die daarstelling van 'n Geskikte Finansiële Bestuur en
Begrotingstelsel om 'n veranderende Suid-Afrika te ondersteun.
Teen die agtergrond van die uitdagings daargestel deur die nuwe politieke
bestel word die revolusie van finansiële bestuur- en begrotingstelsels plaaslik
en in die buiteland ontleed en in perspektief geplaas. Meer spesifiek is die
elemente van elke begrotingstelsel wat die toets van die tyd deurstaan het,
bestudeer.
Internasionale studies van lande wat die veranderingsproses suksesvol
ondergaan het (of tans daarmee besig is), of andersins, word volledig
bespreek om as 'n onskatbare les en ondervinding vir Suid-Afrika in sy
soektog na 'n gladde en vinnige transformasie te dien en om te verhoed dat
dit op net nog 'n onsuksesvolle transformasie uitloop. Dit dien dan as 'n breë
grondslag vir 'n Geskikte Finansiële Bestuur- en Begrotingstelsel wat proaktief
in die Suid-Afrikaanse transformasieproses is.
Suid-Afrika sal nie die wiel kan heruitvind nie. Anders as in ander lande wat
op transformasieprobleme gewag het om hulle te tref, kan die Suid-
Afrikaanse Finansiële Bestuur- en Begrotingstelsels finansiële bestuursbeleid
pro-aktief ondersteun. Dit word bewerkstellig deur 'n omvattende bepaling
van die mikpunte wat bereik moet word deur priorisering en herpriorisering
van planne, doelwitte, prosesse, funksies en aktiwiteite op die kort, medium
en lang termyn. Dit is moontlik indien al die positiewe elemente van
verskillende finansiële bestuur- en begrotingsteiseis, soos bestudeer in en
geleer uit ander lande se ondervindings toegepas word. Suid-Afrika se
Finansiële Bestuur- en Begrotingstelsel behels 'n breë omvattende model wat
put uit al die stelsels wat 'n bepaling van doelstellings, mikpunte, prosesse en
aktiwiteite bevat ten einde te eindig met 'n sterk Finansiële Bestuurswerktuig.
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"Can the national budget influence investment and growth? : - a Ricardian perspective"Mathfield, Damon. January 2006 (has links)
Since Ricardo's nineteenth-century suggestion that the mean's of financing government spending is irrelevant, theoretical debate concerning the burden of government debt has been vigorous / Thesis (M.Econ.)-University of KwaZulu-Natal, Pietermaritzburg, 2006.
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Poverty alleviation in South Africa : can government fiscal expenditure on social services make a difference?January 2005 (has links)
This study examines how the South African government's expenditure on social services
impacts on the poverty levels in the country. To provide a background on poverty,
different concepts and views on the subject are reviewed and then the nature and
distribution of poverty in South Africa are discussed.
In post-apartheid South Africa, the thrust of macroeconomic framework and
corresponding policies implemented by the democratic government have been geared
towards poverty alleviation, employment creation and national output expansion
(economic growth). This study examines the trends in government expenditure on social
services and uses econometric analyses to further investigate the effects of government
spending on social services on the poverty levels in South Africa.
Economic growth and employment opportunities will have to exist and complement
fiscal redistribution to enable the poor lift themselves out of poverty in the long run.
Improved targeting methods that correctly identify the poor could also ensure that social
spending reaches the intended poor, thus narrowing the gap between macro policies and
the poor, and preventing a waste of resources.
Various poverty alleviation measures have been implemented, of which redistribution
through the budgetary policy is an important one. As part of its package towards
addressing the poverty problem, the post-apartheid government in South Africa has
consistently been injecting considerable amounts of resources on inter alia, education,
housing, welfare and health services. The initial results indicate that fiscal redistribution
on its own is inadequate in combating poverty in South Africa. Models that incorporate
economic growth and unemployment show that expenditure on social services do impact
on poverty alleviation, in particular expenditure on housing, education and welfare.
Further regression analyses show that poverty can be tackled through economic growth
and employment creation. In short, there cannot be significant fiscal redistribution unless
the South African economy registers high levels of economic growth and job creation. / Thesis (M.Comm.)-University of KwaZulu-Natal, Pietermaritzburg, 2005.
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Assessment of government spending austerity measures in on-site school support for curriculum delivery: a case of Idutywa Education DistrictLombo, Nomachule January 2016 (has links)
The view of on-site school support for curriculum delivery is shared by most countries and its effects have been felt by schools. There is fear that the Austerity Measures will negate the outcomes of the action taken by the teams that visit the schools. The reviewed literature is more biased towards the Austerity Measures in the whole government sector rather than in a department or an institution like the Education District in Idutywa. Even though the effects of Austerity Measures have been researched all over the world based on a specific country, there is deficiency of such literature done in the institution like the department of Education Districts. The researcher intends contributing to the filling of this gap by this study. The researcher therefore carried out a focused study of the effect of Department’s Austerity Measures on on-site school curriculum support in Idutywa Education District. It is also imperative to know how the teachers are affected by these departmental Austerity Measures, hence the interviews were carried out with the school personnel in addition to the District Professional staff. The District is characterised by poor performance in both Annual National Assessment (ANA) and the final National Senior Certificate results. The findings revealed that the implementation of AM have contributed to, amongst other things, the following issues: The inadequate on-site school support for curriculum delivery; The shortage of resources that includes teachers and vehicles; and ultimately the learner underperformance The researcher expect that the recommendation made will be embraced and be factored through, during the planning process of the Eastern Cape Department of Basic Education in order to improve learner performance.
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Enhancing financial accountability in the acquisition of goods and services : the case of the Eastern Cape Provincial Department of Safety and LiaisonNdaleni, Phumla January 2013 (has links)
Supply Chain Management is an aspect of the procurement process which focuses on addressing the needs of both the service provider and the end user. It has a constitutional status which enables it to contribute towards addressing past discriminatory practices. It assists in correcting the imbalances of the past in the procurement of goods and services for government. Section 217(1) of the Constitution of the Republic of South Africa (Act 108 of 1996) specifies that procurement must be fair, equitable, transparent, competitive and cost effective. Accountability is the most critical element in improving financial management in the public sector. The objective of the study was to highlight the need for accountability in Public Finance Management. Additionally, it was intended to assess the respective roles of the various processes involved in the acquisition of goods and services with the goal of enhancing accountability in the Eastern Cape Department of Safety and Liaison in Bhisho. The study was conducted at the Head Office of the Supply Chain Management Section and the district offices with officials who are responsible for the procurement of goods and services. In order to achieve the objectives of the research, a survey was conducted using the qualitative method to ensure greater understanding and reliability. Convenience sampling was applied as it allowed the researcher to select the sample that was convenient. Moreover, it made it easier to reach the available participants. Data was gathered by means of face-to-face interviews for the Head Office respondents and telephonic interviews for the respondents of the district offices. The study concluded with recommendations emanating from the research findings that are meant to assist in improving accountability in Supply Chain Management within the Eastern Cape Department of Safety and Liaison.
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The impact of foreign debt on economic growth in South AfricaShayanewako, V B January 2013 (has links)
This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
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An assessment of the budgeting system in the Eastern Cape Department of Health to ensure effective and efficient health care service deliveryMangwanya, Maonei Gladys January 2016 (has links)
The National Department of Health is the executive department of the South African government which is assigned to the national health issues of the country. This research was however aimed specifically on the budgeting process within the Eastern Cape Provincial Department of Health. This was provisioned by assessing the significance of the budgeting system and its correlation to efficient and effective healthcare service delivery. The aim of the research was to highlight on how policies have an effect on the budgeting system at the provincial level, considering the provincial health department is responsible for the provision of publicly funded health services. This research assessed the budgeting system in the Eastern Cape Department of Health in an attempt to propagate effective and efficient health service delivery for the general citizenry. This was a qualitative study design which harnessed the merits of secondary data as the main code of the research design which enabled the comprehension of the budgeting system in the Eastern Cape Department of Health. Data was analysed using thematic analysis to examine the distinctive themes and sub-themes identified from within the reviewed literature. The Eastern Cape Province is succumbing to insufficient funding at provincial level and this has a clear-cut reflection on the administration of services within respective departments, particularly the Health Department. This is despite the fact that the Public Finance Management Act, 1999 promotes the objectives of good financial management aimed at maximizing service delivery through the effective use of the limited resources. Resultantly it was fundamental to comprehend on the issues underpinning the scope of budget reporting as well as budget accountability and the effect it has on service delivery in the Eastern Cape Department of Health. Recommendations were thus given based on the discussed and derived themes to ensure that there is an appropriate budgeting system to ensure efficient and effective provision of health care services in the Eastern Cape Department of Health.
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The determinants of government expenditure in South AfricaMaluleke, Glenda 11 1900 (has links)
This study empirically examines the determinants of government expenditure in South Africa using annual data for the period from 1970 to 2014; and provides an overview of the South African government expenditure. The Johansen-Juselius co-integration test established that there is a long-run relationship between government expenditure and its determinants. The error correction model was used to examine the key determinants. The results of this study show that urbanisation rate, national income, poverty reduction; trade openness lagged one period and the wage rate significantly influence the size of government expenditure. Therefore, the study recommend that government create job opportunities; increase its expenditure in developing rural areas; and find ways to manage the public sector wage bill. The study concludes that population growth, inflation and trade openness in current period are not important in determining government expenditure in South Africa / Economics / M. Com. (Economics)
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