A Model to Explain the Impact of Government Revenue on the Quality of Governance and the SDGs

Hall, Stephen G.; O’Hare, Bernadette Ann-Marie

doi:10.3390/economies11040108

Cited by 4 publications

(2 citation statements)

References 41 publications

(48 reference statements)

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“…Further enriching the risk analysis, Brezis (2023) stresses the significance of an "abuse of power"-a legal yet ethically questionable phenomenon-in shaping the landscape of the potential risks and compromises associated with financial statements. Moreover, Hall and O'Hare (2023) argue for a pronounced temporal correlation, asserting that increased government revenue leads to a sustained enhancement of governance. This observed virtuous circle suggests that additional government revenue significantly impacts the achievement of the Sustainable Development Goals beyond prior assessments.…”

Section: Literature Reviewmentioning

confidence: 99%

Enhancing Internal Control Mechanisms in Local Government Organizations: A Crucial Step towards Mitigating Corruption and Ensuring Economic Development

Boufounou,

Eriotis,

Kounadeas

et al. 2024

Economies

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Corruption poses a significant challenge to economic development and governance worldwide, with its detrimental effects permeating various levels of society. In the context of Greece, where corruption has been a longstanding issue, the role of internal audit mechanisms within local government organizations (LGOs) emerges as paramount. This paper presents a comprehensive analysis of the internal control landscape within LGO revenue departments, focusing on factors influencing its effectiveness and proposing strategies for improvement. Drawing upon survey data and regression analyses, this study highlights the crucial role of robust internal control mechanisms in combating corruption and fostering economic development. The findings underscore the importance of competent personnel, legislative compliance, interdepartmental collaboration, and technology utilization in enhancing internal control practices. Despite existing legislation, gaps in internal control implementation persist, including understaffing, inadequate procedures, and limited access to information. This study emphasizes the transformative potential of effective internal audit measures in mitigating corruption at the local level, thereby contributing to broader economic growth and societal well-being. Recommendations for strengthening the internal control structures within LGOs include the formal establishment of internal audit functions, adherence to professional standards, and the promotion of information system utilization. By addressing the corruption and inefficiencies within LGOs, this research underscores the pivotal role of institutional effectiveness in promoting transparency, accountability, and sustainable economic progress.

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Section: Literature Reviewmentioning

confidence: 99%

Enhancing Internal Control Mechanisms in Local Government Organizations: A Crucial Step towards Mitigating Corruption and Ensuring Economic Development

Boufounou,

Eriotis,

Kounadeas

et al. 2024

Economies

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“…The model incorporates the effect of additional revenue on governance indicators (using the Worldwide Governance Indicators, WGI) [77]. Additional revenue equivalent to tax losses drives SDG progress and directly improves governance, which in turn amplifies the impact of the additional revenue on SDG progress, leading to the generation of further revenue and thus a "virtuous circle" [78]. The GRADE modelling assumes that government spending of additional revenue mirrors recent government spending patterns and that an increase in revenue results in improvements for all SDGs and everyone's rights.…”

Section: Estimating the Impact Of Revenue Increases On Sdg Progressmentioning

confidence: 99%

Financing child rights in Malawi

Etter-Phoya,

Manthalu,

Kalizinje

et al. 2023

BMC Public Health

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Background Nearly all countries have ratified the United Nations Convention on the Rights of the Child and, therefore, support children having access to their rights. However, only a small minority of children worldwide have access to their environmental, economic, and social rights. The most recent global effort to address these deficits came in 2015, when the United Nations General Assembly agreed to a plan for a fairer and more sustainable future by 2030 and outlined the Sustainable Development Goals (SDGs). One remediable cause is the lack of revenue in many countries, which affects all SDGs. However, illicit financial flows from low-income to high-income countries, including international tax abuse, continue unabated. Methods Using the most recent estimates of tax abuse perpetuated by multinational companies and tax evasion through offshore wealth, and precise econometric modelling, we illustrate the potential regarding child rights (or progress towards the SDGs) if there was an increase in revenue equivalent to tax abuse in Malawi, a low-income country particularly vulnerable to climate change. The Government Revenue and Development Estimations model provides realistic estimates of government revenue changes in developmental outcomes. Using panel data on government revenue per capita, it models the impact of increased revenue on governance and SDG progress. Results If cross-border tax abuse and tax evasion were curtailed, the equivalent increase in government revenue in one country, Malawi, would be associated with 12,000 and 20,000 people having access to basic water and sanitation respectively each year. Each year, an additional 5000 children would attend school, 150 additional children would survive, and 10 mothers would survive childbirth. Conclusions More children would access their economic and social rights if actions were taken to close the gap in global governance regarding taxation. We discuss the responsibility of duty bearers, the need for a global body to arbitrate and monitor international tax matters, and how the Government of Malawi could take further domestic action to mitigate the gaps in global governance and protect itself against illicit financial flows, including tax abuse.

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Tax expenditures and progress to the Sustainable Development Goals

Masiya,

Hall,

Murray

et al. 2024

Sustainable Development

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This study reports the impact of governments having additional revenue equivalent to tax expenditures on achieving the Sustainable Development Goals in 97 countries. The study draws data on revenue foregone from the Global Tax Expenditure Database. To analyze the potential of an increase in government revenue equivalent to the revenue foregone, the study uses the Government Revenue and Development Estimations modeling. The study finds that if governments had additional revenue equivalent to tax expenditures: an additional 17 million children would attend school (13.62% currently out of school), an additional 70 million people would use basic water (23% of those without access), 146 million would use basic sanitation (20% of those without access), 181,000 children would survive (13% of children who currently die), and 12,000 mothers would survive (16% of mothers who currently die). Critically, there would be improvements in governance indicators in all regions. Foregone revenue from tax expenditures could increase access to public services for millions, which is the most effective tool for reducing inequality and driving progress toward sustainable development. The massive opportunity costs reported here require all governments to report and justify their annual tax expenditure.

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A Model to Explain the Impact of Government Revenue on the Quality of Governance and the SDGs

Cited by 4 publications

References 41 publications

Enhancing Internal Control Mechanisms in Local Government Organizations: A Crucial Step towards Mitigating Corruption and Ensuring Economic Development

Enhancing Internal Control Mechanisms in Local Government Organizations: A Crucial Step towards Mitigating Corruption and Ensuring Economic Development

Financing child rights in Malawi

Tax expenditures and progress to the Sustainable Development Goals

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