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Magister Commercii - MCom / 1. Taxes are an important source of government revenue (income). A failure by the government to collect sufficient taxes to cover for its ever increasing expenditures, engenders fiscal problems. Amongst others the government is compelled to borrow to finance its budget short fall. In this instance, should the government borrow domestically or offshore to finance its short fall . 2. Amongst the theories discussed in this paper, are the views of the Neoclassical Keynesian and the Ricardi an schools of thought. Further more, South African theories on government debt are also discussed. 3. There is a considerably large number of indicators that can be used to determine an appropriate level of both domestic and foreign debt of a country. Certain well establish criteria such as the ratio of foreign interest payments to exports, the ratio of foreign debt to gross domestic product, the ratio of·govemment debt to gross domestic product and the ratio of foreign debt to exports, are amongst the pool of indicators that can be used. However, the following indicators have been identified as the most commonly used in the analysis of budget deficits, and they are; ratio of deficit before borrowing and debt repayment to GDP, the ratio of government debt to GDP, the ratio of interest payments to government expenditure, the level of real interest rates relative to economic growth and the net asset value or net worth of the government. 4. Deficit financing refer to the ways in which the budgetary gap is financed. Overreliance on domestic borrowing may mean high real interest rates and falling investment, and overreliance on foreign borrowing can cause appreciating real exchange rates and unsustainable external indebtedness, amongst others. 5. Amongst the available remedies for debt ills in this country, is the suggestion to significantly cut government expenditure. However, realities currently confronting the authorities, like the increase in public servants as a result of the abolishment of homelands and the constitutionally guaranteed employment of civil servants from the old order, automatically put pressure on public consumption. 6. On the international front, South Africa is underborrowed. In this regard favour should go more for offshore borrowing. Certainly South Africa has to generate the means of meeting debt obligations by running a surplus of exports over imports of goods and services. The bulk of the country's debt is of domestic origin which account for well over 90 % of total debt. The current anti inflationary monetary policy with its concomitant high interest rates, makes domestic borrowing more costly.

This study uses a simple univariate regression model to assess the cyclicality of fiscal policy, based on government expenditure, in South Africa since 1994. The model suggests that that total government expenditure is highly procyclical, indicating that government spending responds positively to economic growth. The results from similar regression focusing on components of government spending suggests that only capital spending (economic classification) and general services (functional classification) are countercyclical, while other classifications are more procyclical in line with total government spending. The procyclicality of expenditure components such as compensation of employees, goods and services and all functional classification is in line with government’s decisions to reduce taxes in order to boost economic activities during periods of recessions, coupled with South Africa’s high public wage bill. The countercyclicality of capital spending is attributed to government's view on prioritising capital projects during periods of recession, in line with the Keynesian theory. Results of procyclicality confirm most of other empirical findings on South Africa’s fiscal policy. However, this suggests that the procyclicality of South Africa’s government expenditure plays only a small role in demand management and therefore stabilising aggregate demand or economic fluctuations. / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

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This dissertation investigates changes in size, composition, and fiscal authority of government expenditure brought on by social disturbance by examining the effects of German reunification on government spending. This research tests several hypotheses using data on total spending and six major sub-policy spending categories between 1972 and 2006. First, this study identifies strong evidence of a large upward displacement effect following reunification, with a particular emphasis on social security spending. Second, this study finds a strong and positive correlation between per capita GDP and total spending as well as social security, education, and public safety spending, which confirms Wagner's Law. Results also reveal that unemployment rate is strongly and positively related to total spending and several sub policy categories both before and after reunification. Additionally, this study finds that the proportions of the youth and elderly populations are negatively associated with total spending after reunification. However, the proportion of the youth population is positively associated with per capita education spending, as the proportion of elderly population with social security spending. The results also show that economic openness has a strong positive impact on both total spending and economic services spending; however, the relationship between economic openness and social security, education, and health spending after reunification is negative. The right party control variable has no significant impact on total spending after reunification, though party control does seem to influence social security and defense spending. Furthermore, the election variable does not have a significant impact on spending except for a positive and significant impact on social security spending after reunification. On the other hand, the coalition government and the proportion of public employees variables have strong and positive impacts on total spending and several sub-policy categories after reunification. The deficit ratio variable is found to have a positive and significant impact on total spending and public safety spending after reunification. Lastly, using a traditional expenditure ratio and a composite ratio to measure fiscal decentralization, this study finds that after reunification there is a trend towards fiscal centralization in total spending and social security, economic services, health, and public safety spending. / Ph. D.

This thesis will discuss the role of government in venture capital market and illustrate the national difference of that through a comparative study of government expenditure supporting policies of venture capital investment in the USA, Canada and China. Firstly, the prototype programs designed by Small Business Administration (SBA) of the United States and Canadian policies by the Business Development Bank of Canada (BDC) will be discussed. Secondly, the current Chinese government expenditure supporting policies will then be studied in the context of the Chinese venture capital market’s unique political, economical and legislative background. Ultimately, potential improvements in the future expenditure incentive programs in China will be explored.

This thesis will discuss the role of government in venture capital market and illustrate the national difference of that through a comparative study of government expenditure supporting policies of venture capital investment in the USA, Canada and China. Firstly, the prototype programs designed by Small Business Administration (SBA) of the United States and Canadian policies by the Business Development Bank of Canada (BDC) will be discussed. Secondly, the current Chinese government expenditure supporting policies will then be studied in the context of the Chinese venture capital market’s unique political, economical and legislative background. Ultimately, potential improvements in the future expenditure incentive programs in China will be explored.

1980年代以來，國家競爭力的概念漸受重視，提升國家競爭力成為各國政府主要的施政目標。雖然國家競爭力因具有一定的重要性而被各界所接受，但時至今日仍缺乏對其共通之定義及衡量方法。本文係以目前最具公信力的衡量機構，即瑞士洛桑國際管理學院 (IMD) 與世界經濟論壇 (WEF) 所做的國家競爭力研究報告加以探討。 本研究以政府活動的內生成長模型為理論基礎，由政府支出面來探討其與國家競爭力的關係及影響國家競爭力的程度。經由具有公信力的國家競爭力評比中，選取具有比較性的國家，研究其支出結構的變動對其競爭力排名是否造成影響。本研究結果，主要發現，一般公共服務及公共秩序支出比重，對國家競爭力的提升有所幫助，但並非具有絕對正向關係；教育支出比重較高，對國家競爭力的提升具有正面效果；保健支出比重及經濟支出比重無法直接影響國家競爭力相關細項指標；政府投入適度的社福支出，對整體社會的穩定有所幫助。並提出可參採建議為，預算支出結構並無各國一體適用的最佳配置，應尋求符合國家整體最大利益的配置方式；參考先進國家預算支出結構，適當調整我國各項職能所占比重；知識經濟時代，宜由增加教育投資，提升國家整體人力素質；今後國家的發展，宜注意各項預算支出對國家競爭力實際可能產生的影響；政府各部門宜重視公共支出如何配合施政目標，以提升政府效率。 / Since the 1980s, the concept of national competitiveness has gradually gained attentions, and how to enhance national competitiveness becomes a major goal for the governments. Although this concept has been widely accepted because of its importance, until today there doesn’t have common definitions and measurements against the competitiveness. This paper is produced by exploration of the reports in regards to the competitiveness of countries of the world which were generated by the most credible unions, the International Institute for Management Development in Switzerland (IMD) and the World Economic Forum (WEF). This paper researches, with references to endogenous growth theory, the relationships between the government expenditures and country’s competitiveness. Through the credible comparability assessments, this paper selects major countries to research how the expenditure structures influence the national competitiveness. The important conclusion from this research tells that it’s not always positive correlation between the weighting of government’s general public services expenditure and the improvement of country’s competitiveness, though general public services expenditure is helpful for competitiveness. Education expenditure does positively affect the competitiveness. The weighting of health expenditure and economic affairs expenditure can’t affect relevant competitiveness indicators. Appropriate social welfare from government helps for the stabilization of the society. This research suggests there is no best budget structure fits in with all countries, governments need to assess respective budget allocation approach to maximize the interests for the country. Governments can refer to developed countries for their budget structure in relevant areas to adjust own budget allocation. In the era of knowledge centric economy, governments should lift manpower quality by allocation of more resources in education. In view of country’s development in the future, governments should be aware how budget structure can affect country’s competitiveness. All departments of the government should care how public expenditure can support country’s goals in order to enhance government performance.

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