Abstract: This study utilizes the International Monetary Fund (IMF) Fiscal Rules Dataset focusing on four specific fiscal rules such as expenditure rule, revenue rule, budget balance rule, and debt rule and five main characteristics of each fiscal rule those are monitoring, enforcement, coverage, legal basis, and escape clause to construct the Fiscal Rule Index for nine countries in the Asia-Pacific region from 1996 to 2015. After constructing the fiscal rule index for each country, we utilize the Panel Generalized Method of Moments (Panel GMM) by using the constructed fiscal rule index to examine the effectiveness of fiscal rules in reducing procyclicality. Empirical results show that national fiscal rules have a significantly negative impact on procyclicality of government expenditure. Additionally, stricter fiscal rules combined with high government effectiveness are effective in reducing procyclicality of government expenditure. Results of this study indicate that for nine Asia-Pacific countries, policymakers’ use of fiscal rules and government effectiveness to reducing procyclicality of fiscal policy are effective.
Abstract: This study utilizes the quantile regression analysis to examine the impact of governance (including democratic quality and technical quality) on happiness in 101 countries worldwide, classified as “developed countries” and “developing countries”. The empirical results show that the impact of democratic quality and technical quality on happiness is significantly positive for “developed countries”, while is insignificant for “developing countries”. The results suggest that the authorities in developed countries can enhance the level of individual happiness by means of improving the democracy quality and technical quality. However, for developing countries, promoting the quality of governance in order to enhance the level of happiness may not be effective. Policy makers in developed countries may pay more attention on increasing real GDP per capita instead of promoting the quality of governance to enhance individual happiness.
Abstract: This study utilizes a frequency domain approach over
the period of 1996 to 2013 to examine the causal relationship between
governance and economic growth in ten Asian countries, which have
different levels of democracy; classified as “Free”, “Partly Free”, and
“Not Free” countries. The empirical results show that there is no
Granger causality running from governance to economic growth in
“Not Free” countries and “Partly Free” countries with the exception of
Singapore. As for “Free” countries such as South Korea and Taiwan,
there is a one-way causality running from governance to economic
growth. The findings of this study indicate that policy makers in South
Korea, Taiwan, and Singapore could use governance index to improve
their predictions of the future economic growth.
Abstract: This study examines whether the Taiwan’s public debt is sustainable utilizing an unrestricted two-regime threshold autoregressive (TAR) model with an autoregressive unit root. The empirical results show that Taiwan’s public debt appears as a nonlinear series and is stationary in regime 1 but not in regime 2. This result implies that while Taiwan’s public debt was mostly sustainable over the 1996 to 2013 period examined in the study, it may no longer be sustainable in the most recent two years as the public debt ratio has increased cumulatively to 3.618%.
Abstract: This article presents a monitoring indicators system
that predicts whether a local government in Taiwan is heading for
fiscal distress and identifies a suitable fiscal policy that would allow
the local government to achieve fiscal balance in the long run. This
system is relevant to stockholders’ interest, simple for national audit
bodies to use, and provides an early warning of fiscal distress that
allows preventative action to be taken.
Abstract: Previous studies on political budget cycles (PBCs)
implicitly assume the executive has full discretion power over fiscal
policy, neglecting the role of checks and balances of the legislature.
This paper goes beyond traditional PBCs models and sheds light on
the case study of Japan, South Korea, and Taiwan over the 1988-2007
periods. Based on the results, we find no evidence of electoral impacts
on the public expenditures in South Korean and Taiwan's
congressional elections. We also noted that PBCs are found on
Taiwan-s government expenditures during our sample periods.
Furthermore, the results also show that Japan-s legislature has a
significant checks and balances on government-s expenditures.
However, empirical results show that the legislature veto player in
Taiwan neither has effect on the reduction of public expenditures, nor
has the moderating effect over Taiwan-s political budget cycles, albeit
that they are statistically insignificant.We suggest that the existence of
PBCs in Taiwan is due to a weaker systemof checks and balances. Our
conjecture is that Taiwan either has no legislative veto player or has
observed low compliance to the law during the time period examined
in our study.
Abstract: This study utilizes the panel vector error correction
model (PVECM) to examine the relationship among corruption,
economic growth, and income inequality experienced within ten Asian
countries over the 1995 to 2010 period. According to the empirical
results, we do not support the common perception that corruption
decreases economic growth. On the contrary, we found that corruption
increases economic growth. Meanwhile, an increase in economic
growth will cause an increase in income inequality, although the effect
is insignificant. Similarly, an increase in income inequality will cause
an increase in economic growth but a decrease in corruption, although
the effect is also insignificant.
Abstract: This paper develops the fiscal health index of 21 local
governments in Taiwan over the 1984 to 2010 period. A quantile
regression analysis was used to explore the extent that economic
variables, political budget cycles, and legislative checks and balances,
impact different quantiles of fiscal health index for a country over a
sample period of time. Our findings suggest that local governments at
the lower quantile are significantly benefited from political budget
cycles and the increase in central government revenues, while
legislative effective checks and balances and the increase in central
government expenditures have a significantly negative effect on local
fiscal health. When local governments are in the upper tail of the
distribution, legislative checks and balances and growth in
macroeconomics have significant and adverse effects on the fiscal
health of local governments. However, increases in central
government revenues have significant and positive effects on the
health status of local government in Taiwan.