Quality of Public Finance and Economic Growth in the Czech Republic

Abstract

Quality of public finances belongs to a key policy challenge as its improvement should lead to a longterm economic growth. The aim of the paper is to investigate if the key channels and tools used by the public finance (structure of revenue system, size of the government and composition of expenditure, level and sustainability of fiscal position) affect economic growth in the Czech Republic in the period 1995-2013. The empirical model is based on the methodology of Barro and Sala-i-Martin (2003) and the model of Mankiw et al. (1992) which is adapted to the framework of this study. The results of dynamic regressions suggest that economic growth is affected by public finance variables only partly and traditional sources of economic growth (human capital or openness) play bigger role. Provided evidence shows that total tax burden as well as the structure of revenue system (especially implicit tax rates on labour and consumption) should be primarily used as tools for maintain macroeconomic objectives. On the contrary, changes in size and composition of expenditure, balance and debt report not statistically significant impact.

Experimental Use Of a Market-Based Approach to the Efficient Allocation of Resources within the Government Budget

“…The parameters are then set out in the Medium-Term Outlook for the Government Budget, the Macroeconomic Forecast of the Ministry of Finance (MFCR, 2018a), the EU Multiannual Financial Framework (EC, 2018), etc., with the decisive features provided by the closing account of the state budget for the year (MFCR, 2018b). This article assumes that an important conditioning factor is the composition and efficiency of public expenditure (Szarovská, 2016). The idea of the importance of a proper structure of public finances determines the aim of this article -increasing the real efficiency of the distribution of budget resources can help the overall efficiency of public finances and the whole economy.…”

Nexus Between Public Finance and Economic Growth in Nigeria

“…The experimental proof of the investigation suggests that savings contribute to true movement in the long run, both in the pre-and post-break age, while economic growth leads to pre-break savings. In a study carried out by (Szarowska, 2016) Omankhanlen, Ogaga, Oghene, Obarisiagbon & Okorie (2014) examined the Nigerian government expenditure on Human Capital Development. As indicated by the investigation the degree of human capital improvement, is an impression of the degree of wellbeing and instruction of a country and it influences the degree of financial exercises in that country.…”

Africas Human Capital Development: Is Public Finance Management an Effective Strategy?

“…The effect of public finance on economic growth is the major focus of many studies coupled with the paucity of comprehensive accounts and resulting ambiguity on the role of public finance in human capital development process (Gemmell et al, 2011;Kotlán et al, 2011;Macek and Janků, 2015;Szarowská, 2016). In the literature, some show that public expenditure positively affects human welfare while others stress that it inversely impacts peoples' wellbeing.…”

“…As literature seems not to have comprehensively addressed this topical issue with specific attention and focus on the circumstances of SSA countries, the link between public finance management and human capital may not be absolute or clear in the region. Moreover, public finance-growth nexus has been the usual topic of most studies (Korman and Bratimasrene, 2007;Macek and Janků, 2015;Szarowská, 2016). It is evident that there is dearth of systematic analysis that centers exclusively on how public finances influence human capital development in Africa.…”