Impacts of public expenditure on economic growth in the Mekong delta: A study regulated by the law on state budget
Main Article Content
Abstract
The paper analyzes the role of the state budget law change in 2015 that came into effect in 2017 on the relationship of public expenditure and economic growth in the Mekong Delta. With balance sheet data of 13 provinces and cities collected in 02 periods 2012-2016 (applying the state budget law 2002) and the period 2017-2022 (applying the state budget law 2015). Bayesian model estimates show that changes in state budget laws have a positive impact on the relationship between public expenditure and economic growth in the Mekong Delta. Specifically, the research results show that the change in the state budget law in 2015 has a positive impact on the economic growth of the region. In addition, the research results also show that non-budget capital, corruption control, and working age have a positive impact on economic growth in the Mekong Delta. From the research results, the author proposes implications to improve the efficiency of public expenditure management, increase the attraction of extra-budgetary investment and promote the efficiency of labor resources of the region, contributing to promoting economic growth in the Mekong Delta.
Article Details
Keywords
Economic growth, Law on State Budget, Mekong Delta, Public expenditure, Regulation
References
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Afonso, A., & Furceri, D. (2010). Government size, composition, volatility, and economic growth. European Journal of Political Economy, 26(4), 517–532. https://doi.org/10.1016/j.ejpoleco.2010.02.002
Aidt, T., Dutta, J., & Sena, V. (2008). Governance regimes, corruption and growth: theory and evidence. Journal of Comparative Economics, 36(2), 195–220. https://doi.org/10.1016/j.jce.2007.11.004
Alfada, A. (2019). The destructive effect of corruption on economic growth in Indonesia: A threshold model. Heliyon, 5(10), 1–14. https://doi.org/10.1016/j.heliyon.2019.e02649
Arestis, P., Şen, H., & Kaya, A. (2021). On the linkage between government expenditure and output: empirics of the Keynesian view versus Wagner’s law. Economic Change and Restructuring, 54(2), 265-303. https://doi.org/10.1007/s10644-020-09284-7
Asghar, N. A. N., Azim, P. A. P., & ur Rehman, H. (2011). Impact of Government Spending in Social Sectors on Economic Growth: A Case Study of Pakistan: Impact of Government Spending in Social Sectors on Economic Growth: A Case Study of Pakistan. Journal of Business & Economics (JBE), 3(2), 214-234.
Attari, M. I. J., & Javed, A. Y. (2013). Inflation, Economic Growth and Government Expenditure of Pakistan: 1980-2010. Procedia Economics and Finance, 5, 58–67. https://doi.org/10.1016/S2212-5671(13)00010-5
Barro, R. J. (1990). Government spending in a simple model of endogenous growth. Journal of Political Economy, 98(2), 103–125. https://doi.org/10.1086/261726
Barro, R. J. (1991). Economic growth in a cross section of countries. Quarterly Journal of Economics, 106(2), 407–443. https://doi.org/10.2307/2937943
Beck, N., & Katz, J. N. (1995). What to do (và not to do) with time-series cross-section data. American Political Science Review, 89(3), 634-647. https://doi.org/10.2307/2082979
Butkiewicz, J. L. & Yanikkaya, H. (2011). Institutions and the impact of government spending on growth. Journal of Applied Economics, 14(2), 319–341. https://doi.org/10.1016/S1514-0326(11)60017-2
Cies ́lik, A., & Goczek, L. (2018). Control of corruption, international investment, and economic growth – Evidence from panel data. World Development, 103, 323–335. https://doi.org/10.1016/j.worlddev.2017.10.028
Colombatto, E. (2003). Why is corruption tolerated?. The Review of Austrian Economics, 16, 363–379. https://doi.org/10.1023/A:1027349206371
Đặng Văn Cường, Đỗ Thị Hoài (2014). Tác động của chi tiêu công đến tăng trưởng kinh tế: Minh chứng dữ liệu chuỗi tại TP. Hồ Chí Minh. Tạp chí phát triển và hội nhập, 18(28), 27-33
Dar, A. A., & Amir Khalkhali, S. (2002). Government size, factor accumulation, and economic growth: Evidence from oecd countries. Journal of Policy Modeling, 24(7-8), 679–692. https://doi.org/10.1016/S0161-8938(02)00163-1
Devarajan, S., Swaroop, V., & Zou, H. F. (1996). The composition of public expenditure and economic growth. Journal of Monetary Economics, 37(2), 313-344. https://doi.org/10.1016/S0304-3932(96)90039-2
Folster, S., & Henrekson, M. (1999). Growth and the public sector: A critique of the critics. European Journal of Political Economy, 15(2), 337–358. https://doi.org/10.1016/S0176-2680(99)00010-5
Folster, S., & Henrekson, M. (2001). Growth effects of government expenditure and taxation in rich countries. European Economic Review, 45(8), 1501–1520. https://doi.org/10.1016/S0014-2921(00)00083-0
Ghose, A., & Das, S. (2013) Government size and economic growth in emerging market economies: a panel co-integration approach. Macroeconomics and Finance in Emerging Market Economies, 6(1), 14–38. https://doi.org/10.1080/17520843.2012.697075
Grier, K. B., & Tullock, G. (1989). An empirical analysis of cross-section economic growth, 1951-1980. Journal of Monetary Economics, 24(2), 259–276. https://doi.org/10.1016/0304-3932(89)90006-8
Gujarati, J. (2012, April). A comprehensive induction system: A key to the retention of highly qualified teachers. In The Educational Forum (Vol. 76, No. 2, pp. 218-223). Taylor & Francis Group. https://doi.org/10.1080/00131725.2011.652293
Solow, R. M. (1957). Technical change and the aggregate production function. The Review of Economics and Statistics, 39(3), 312-320. https://doi.org/10.2307/1926047
Kelly, T. (1997). Public expenditures and growth. The Journal of Development Studies, 34(1), 60-84. https://doi.org/10.1080/00220389708422503
Ranis, G. (2004). Human Development and Economic Growth (No. 28375). Yale University, Economic Growth Center. https://ssrn.com/abstract=551662
Guseh, J. S. (1997). Government size and economic growth in developing countries: A political-economy framework. Journal of Macroeconomics, 19(1), 175–192. https://doi.org/10.1016/S0164-0704(97)00010-4
Hajamini, M., & Falahi, M. A. (2018). Economic growth and government size in developed European countries: A panel threshold approach. Economic Analysis and Policy, 58, 1–13. https://doi.org/10.1016/j.eap.2017.12.002
Hansson, P., & Henrekson, M. (1994). A new framework for testing the effect of government spending on growth and productivity. Public Choice, 81, 381–401. https://doi.org/10.1007/BF01053239
Hoàng Thị Chinh Thon, Phạm Thị Hương, và Phạm Thị Thủy (2010). Tác động của chi tiêu công tới tăng trưởng kinh tế tại các địa phương ở Việt Nam. Trung tâm nghiên cứu kinh tế và chính sách (Vietnam Center for Economic and Policy Research), available at< http://vepr. org. vn/533/ebook/nc-19-tac-dong-cua-chi-tieu-cong-toi-tang-truong-kinh-te-tai-cacdia-phuong-o-viet-nam/25115. html.
Hoechle, D. (2007). Robust stvàard errors for panel regressions with cross-sectional dependence. The stata journal, 7(3), 281-312. https://doi.org/10.1177/1536867X070070030
Huang, C. J. (2016). Is corruption bad for economic growth? Evidence from Asia-Pacific countries. The North American Journal of Economics and Finance, 35, 247–256. https://doi.org/10.1016/j.najef.2015.10.013
Ighodaro, C. A., & Oriakhi, D. E. (2010). Does the relationship between government expenditure and economic growth follow Wagner’s law in Nigeria. Annals of University of Petrosani Economics, 10(2), 185-198. http://upet.ro/annals/economics/pdf/2010/20100217.pdf
Kato, A., & Sato, T., 2015. Greasing the wheels? The effect of corruption in regulated manufacturing sectors of India. Canadian Journal of Development Studies, 36(4), 459–483. https://doi.org/10.1080/02255189.2015.1026312
Lucas Jr, R. E. (1978). Asset prices in an exchange economy. Econometrica: journal of the Econometric Society, 1429-1445. https://doi.org/10.2307/1913837
Liu, D., Xu, C., Yu, Y., Rong, K., & Zhang, J. (2020). Economic growth target, distortion of public expenditure and business cycle in China. China Economic Review, 63(C). https://doi.org/10.1016/j.chieco.2019.101373
Nurudeen, A., & Usman, A. (2010). Government expenditure and economic growth in Nigeria, 1970-2008: A disaggregated analysis. Business and Economics Journal, 4(1), 1-11.
Phạm Thế Anh (2008a). Chi tiêu Chính phủ và tăng trưởng kinh tế: khảo sát lý luận tổng quan. Tạp chí Nghiên cứu kinh tế, 365. http://vepr.org.vn/upload/533/20170428/NC-0239.pdf
Phạm Thế Anh (2008b). Phân tích cơ cấu chi tiêu Chính phủ và tăng trưởng kinh tế ở Việt Nam. Tạp chí Nghiên cứu kinh tế, 363. http://vepr.org.vn/upload/533/20170428/NC-03.pdf
Quy, N. H. (2017). The Role of Public Expenditures in Economic Growth at Provincial Level: Empirical Study in Vietnam. Journal of Politics and Law, 10(2), 88-96. https://doi.org/10.5539/jpl.v10n2p88
Romero-Ávila, D., Strauch, R. (2008). Public finances and long-term growth in europe: Evidence from a panel data analysis. European Journal of Political Economy, 24(1), 172–191. https://doi.org/10.1016/j.ejpoleco.2007.06.008
Schaltegger, C. A., & Torgler, B. (2006). Growth effects of public expenditure on the state and local level: Evidence from a sample of rich governments. Applied Economics, 38(10), 1181–1192. https://doi.org/10.1080/00036840500392334
Yasin, M. (2011). Public spending and economic growth: empirical investigation of Sub-Saharan Africa. Southwestern Economic Review, 30, 59-68. https://swer.wtamu.edu/sites/default/files/Data/59-68-114-435-1-PB.pdf
Flegal, J. M., Haran, M., & Jones, G. L. (2008). Markov chain Monte Carlo: Can we trust the third significant figure? Statistical Science, 23(2), 250-260. https://www.jstor.org/stable/27645897
Gelman, A., & Rubin, D. B. (1992). Inference from iterative simulation using multiple sequences. Statistical Science, 7(4), 457-472. https://doi.org/10.1214/ss/1177011136
Kruschke, J. K. (2011). Bayesian assessment of null values via parameter estimation and model comparison. Perspectives on Psychological Science, 6(3), 299-312. https://doi.org/10.1177/1745691611406925
McNeish, D. M. (2016). Using data-dependent priors to mitigate small sample bias in latent growth models: A discussion and illustration using M plus. Journal of Educational and Behavioral Statistics, 41(1), 27-56. https://doi.org/10.3102/1076998615621299
Roberts, G. O., & Rosenthal, J. S. (2001). Optimal scaling for various Metropolis-Hastings algorithms. Statistical Science, 16(4), 351-367. https://doi.org/10.1214/ss/1015346320
Ghose, A., & Das, S. (2013). Government size and economic growth in emerging market economies: a panel co-integration approach. Macroeconomics and Finance in Emerging Market Economies, 6(1), 14-38. https://doi.org/10.1080/17520843.2012.697075
Attari, M. I. J., & Javed, A. Y. (2013). Inflation, economic growth and government expenditure of Pakistan: 1980-2010. Procedia Economics and Finance, 5, 58-67. https://doi.org/10.1016/S2212-5671(13)00010-5
Guseh, J. S. (1997). Government size and economic growth in developing countries: a political-economy framework. Journal of Macroeconomics, 19(1), 175-192. https://doi.org/10.1016/S0164-0704(97)00010-4
Hajamini, M., & Falahi, M. A. (2018). Economic growth and government size in developed European countries: A panel threshold approach. Economic Analysis and Policy, 58, 1-13. https://doi.org/10.1016/j.eap.2017.12.002
Afonso, A., & Furceri, D. (2010). Government size, composition, volatility, and economic growth. European Journal of Political Economy, 26(4), 517–532. https://doi.org/10.1016/j.ejpoleco.2010.02.002
Aidt, T., Dutta, J., & Sena, V. (2008). Governance regimes, corruption and growth: theory and evidence. Journal of Comparative Economics, 36(2), 195–220. https://doi.org/10.1016/j.jce.2007.11.004
Alfada, A. (2019). The destructive effect of corruption on economic growth in Indonesia: A threshold model. Heliyon, 5(10), 1–14. https://doi.org/10.1016/j.heliyon.2019.e02649
Arestis, P., Şen, H., & Kaya, A. (2021). On the linkage between government expenditure and output: empirics of the Keynesian view versus Wagner’s law. Economic Change and Restructuring, 54(2), 265-303. https://doi.org/10.1007/s10644-020-09284-7
Asghar, N. A. N., Azim, P. A. P., & ur Rehman, H. (2011). Impact of Government Spending in Social Sectors on Economic Growth: A Case Study of Pakistan: Impact of Government Spending in Social Sectors on Economic Growth: A Case Study of Pakistan. Journal of Business & Economics (JBE), 3(2), 214-234.
Attari, M. I. J., & Javed, A. Y. (2013). Inflation, Economic Growth and Government Expenditure of Pakistan: 1980-2010. Procedia Economics and Finance, 5, 58–67. https://doi.org/10.1016/S2212-5671(13)00010-5
Barro, R. J. (1990). Government spending in a simple model of endogenous growth. Journal of Political Economy, 98(2), 103–125. https://doi.org/10.1086/261726
Barro, R. J. (1991). Economic growth in a cross section of countries. Quarterly Journal of Economics, 106(2), 407–443. https://doi.org/10.2307/2937943
Beck, N., & Katz, J. N. (1995). What to do (và not to do) with time-series cross-section data. American Political Science Review, 89(3), 634-647. https://doi.org/10.2307/2082979
Butkiewicz, J. L. & Yanikkaya, H. (2011). Institutions and the impact of government spending on growth. Journal of Applied Economics, 14(2), 319–341. https://doi.org/10.1016/S1514-0326(11)60017-2
Cies ́lik, A., & Goczek, L. (2018). Control of corruption, international investment, and economic growth – Evidence from panel data. World Development, 103, 323–335. https://doi.org/10.1016/j.worlddev.2017.10.028
Colombatto, E. (2003). Why is corruption tolerated?. The Review of Austrian Economics, 16, 363–379. https://doi.org/10.1023/A:1027349206371
Đặng Văn Cường, Đỗ Thị Hoài (2014). Tác động của chi tiêu công đến tăng trưởng kinh tế: Minh chứng dữ liệu chuỗi tại TP. Hồ Chí Minh. Tạp chí phát triển và hội nhập, 18(28), 27-33
Dar, A. A., & Amir Khalkhali, S. (2002). Government size, factor accumulation, and economic growth: Evidence from oecd countries. Journal of Policy Modeling, 24(7-8), 679–692. https://doi.org/10.1016/S0161-8938(02)00163-1
Devarajan, S., Swaroop, V., & Zou, H. F. (1996). The composition of public expenditure and economic growth. Journal of Monetary Economics, 37(2), 313-344. https://doi.org/10.1016/S0304-3932(96)90039-2
Folster, S., & Henrekson, M. (1999). Growth and the public sector: A critique of the critics. European Journal of Political Economy, 15(2), 337–358. https://doi.org/10.1016/S0176-2680(99)00010-5
Folster, S., & Henrekson, M. (2001). Growth effects of government expenditure and taxation in rich countries. European Economic Review, 45(8), 1501–1520. https://doi.org/10.1016/S0014-2921(00)00083-0
Ghose, A., & Das, S. (2013) Government size and economic growth in emerging market economies: a panel co-integration approach. Macroeconomics and Finance in Emerging Market Economies, 6(1), 14–38. https://doi.org/10.1080/17520843.2012.697075
Grier, K. B., & Tullock, G. (1989). An empirical analysis of cross-section economic growth, 1951-1980. Journal of Monetary Economics, 24(2), 259–276. https://doi.org/10.1016/0304-3932(89)90006-8
Gujarati, J. (2012, April). A comprehensive induction system: A key to the retention of highly qualified teachers. In The Educational Forum (Vol. 76, No. 2, pp. 218-223). Taylor & Francis Group. https://doi.org/10.1080/00131725.2011.652293
Solow, R. M. (1957). Technical change and the aggregate production function. The Review of Economics and Statistics, 39(3), 312-320. https://doi.org/10.2307/1926047
Kelly, T. (1997). Public expenditures and growth. The Journal of Development Studies, 34(1), 60-84. https://doi.org/10.1080/00220389708422503
Ranis, G. (2004). Human Development and Economic Growth (No. 28375). Yale University, Economic Growth Center. https://ssrn.com/abstract=551662
Guseh, J. S. (1997). Government size and economic growth in developing countries: A political-economy framework. Journal of Macroeconomics, 19(1), 175–192. https://doi.org/10.1016/S0164-0704(97)00010-4
Hajamini, M., & Falahi, M. A. (2018). Economic growth and government size in developed European countries: A panel threshold approach. Economic Analysis and Policy, 58, 1–13. https://doi.org/10.1016/j.eap.2017.12.002
Hansson, P., & Henrekson, M. (1994). A new framework for testing the effect of government spending on growth and productivity. Public Choice, 81, 381–401. https://doi.org/10.1007/BF01053239
Hoàng Thị Chinh Thon, Phạm Thị Hương, và Phạm Thị Thủy (2010). Tác động của chi tiêu công tới tăng trưởng kinh tế tại các địa phương ở Việt Nam. Trung tâm nghiên cứu kinh tế và chính sách (Vietnam Center for Economic and Policy Research), available at< http://vepr. org. vn/533/ebook/nc-19-tac-dong-cua-chi-tieu-cong-toi-tang-truong-kinh-te-tai-cacdia-phuong-o-viet-nam/25115. html.
Hoechle, D. (2007). Robust stvàard errors for panel regressions with cross-sectional dependence. The stata journal, 7(3), 281-312. https://doi.org/10.1177/1536867X070070030
Huang, C. J. (2016). Is corruption bad for economic growth? Evidence from Asia-Pacific countries. The North American Journal of Economics and Finance, 35, 247–256. https://doi.org/10.1016/j.najef.2015.10.013
Ighodaro, C. A., & Oriakhi, D. E. (2010). Does the relationship between government expenditure and economic growth follow Wagner’s law in Nigeria. Annals of University of Petrosani Economics, 10(2), 185-198. http://upet.ro/annals/economics/pdf/2010/20100217.pdf
Kato, A., & Sato, T., 2015. Greasing the wheels? The effect of corruption in regulated manufacturing sectors of India. Canadian Journal of Development Studies, 36(4), 459–483. https://doi.org/10.1080/02255189.2015.1026312
Lucas Jr, R. E. (1978). Asset prices in an exchange economy. Econometrica: journal of the Econometric Society, 1429-1445. https://doi.org/10.2307/1913837
Liu, D., Xu, C., Yu, Y., Rong, K., & Zhang, J. (2020). Economic growth target, distortion of public expenditure and business cycle in China. China Economic Review, 63(C). https://doi.org/10.1016/j.chieco.2019.101373
Nurudeen, A., & Usman, A. (2010). Government expenditure and economic growth in Nigeria, 1970-2008: A disaggregated analysis. Business and Economics Journal, 4(1), 1-11.
Phạm Thế Anh (2008a). Chi tiêu Chính phủ và tăng trưởng kinh tế: khảo sát lý luận tổng quan. Tạp chí Nghiên cứu kinh tế, 365. http://vepr.org.vn/upload/533/20170428/NC-0239.pdf
Phạm Thế Anh (2008b). Phân tích cơ cấu chi tiêu Chính phủ và tăng trưởng kinh tế ở Việt Nam. Tạp chí Nghiên cứu kinh tế, 363. http://vepr.org.vn/upload/533/20170428/NC-03.pdf
Quy, N. H. (2017). The Role of Public Expenditures in Economic Growth at Provincial Level: Empirical Study in Vietnam. Journal of Politics and Law, 10(2), 88-96. https://doi.org/10.5539/jpl.v10n2p88
Romero-Ávila, D., Strauch, R. (2008). Public finances and long-term growth in europe: Evidence from a panel data analysis. European Journal of Political Economy, 24(1), 172–191. https://doi.org/10.1016/j.ejpoleco.2007.06.008
Schaltegger, C. A., & Torgler, B. (2006). Growth effects of public expenditure on the state and local level: Evidence from a sample of rich governments. Applied Economics, 38(10), 1181–1192. https://doi.org/10.1080/00036840500392334
Yasin, M. (2011). Public spending and economic growth: empirical investigation of Sub-Saharan Africa. Southwestern Economic Review, 30, 59-68. https://swer.wtamu.edu/sites/default/files/Data/59-68-114-435-1-PB.pdf
Flegal, J. M., Haran, M., & Jones, G. L. (2008). Markov chain Monte Carlo: Can we trust the third significant figure? Statistical Science, 23(2), 250-260. https://www.jstor.org/stable/27645897
Gelman, A., & Rubin, D. B. (1992). Inference from iterative simulation using multiple sequences. Statistical Science, 7(4), 457-472. https://doi.org/10.1214/ss/1177011136
Kruschke, J. K. (2011). Bayesian assessment of null values via parameter estimation and model comparison. Perspectives on Psychological Science, 6(3), 299-312. https://doi.org/10.1177/1745691611406925
McNeish, D. M. (2016). Using data-dependent priors to mitigate small sample bias in latent growth models: A discussion and illustration using M plus. Journal of Educational and Behavioral Statistics, 41(1), 27-56. https://doi.org/10.3102/1076998615621299
Roberts, G. O., & Rosenthal, J. S. (2001). Optimal scaling for various Metropolis-Hastings algorithms. Statistical Science, 16(4), 351-367. https://doi.org/10.1214/ss/1015346320
Ghose, A., & Das, S. (2013). Government size and economic growth in emerging market economies: a panel co-integration approach. Macroeconomics and Finance in Emerging Market Economies, 6(1), 14-38. https://doi.org/10.1080/17520843.2012.697075
Attari, M. I. J., & Javed, A. Y. (2013). Inflation, economic growth and government expenditure of Pakistan: 1980-2010. Procedia Economics and Finance, 5, 58-67. https://doi.org/10.1016/S2212-5671(13)00010-5
Guseh, J. S. (1997). Government size and economic growth in developing countries: a political-economy framework. Journal of Macroeconomics, 19(1), 175-192. https://doi.org/10.1016/S0164-0704(97)00010-4
Hajamini, M., & Falahi, M. A. (2018). Economic growth and government size in developed European countries: A panel threshold approach. Economic Analysis and Policy, 58, 1-13. https://doi.org/10.1016/j.eap.2017.12.002
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