Public spending and old age

With the elderly, as with other beneficiaries of the welfare state, need seems to rise faster than available resources. A closer look at the precise nature of the need can lead to a better balance between cash payments and service provisions. And, in the end, quite modest proposals can lead to significant benefits.     

Public engagement through social media: the spending review experience

This paper, relying on three empirical cases of spending reviews carried out in Europe, investigates how social media has been used to engage citizens in spending review processes. The authors explain the differences in levels of engagement between the use of social media (Web 2.0 tools) compared to traditional Web 1.0 tools. Finally, they discuss how government might genuinely listen to its citizens and work with them.     

Public sector risk managers and spending cuts: mitigating risks

This paper reports case study research, the results of which are used to consider whether councils have recognised the potentially substantially increased social risks they may create as they seek to reduce their spending in line with the UK Government’s programme of public sector austerity. It discusses the conceptual shift in the public sector risk management literature towards social risk management (SRM), presents empirical evidence of social risks and considers the approach to SRM developed by other organisations. It finds no evidence of SRM within the case study authorities and so advocates a shift in the public sector risk management culture from a preoccupation with defensive-institutional risk management practices to a more proactive social dimension. In so doing, it discusses the goals of SRM, the constraints limiting their achievement, metrics for measuring social risk, tools for mitigating social risk and the problems faced when operationalising SRM.     

People's choice: Public spending,taxation and local rates

Elections may reflect ideological swings, but they do not enable voters to take account either of trade‐offs between spending programmes or of the price of extra spending in terms of higher taxes. No satisfactory way has yet been found of consulting voters on this point. Here is one suggestion.     

Public and private spending for environmental protection: a cross‐country policy analysis

OECD data are used to investigate public and private environmental expenditures and, although they are more complete and consistent than other datasets, they are still poor. This is important in the context of measuring the benefits of environmental protection, when little is really known about its actual costs. Despite these limitations, this study demonstrates that there has been no shift towards an increasing private sector burden relative to the public sector over time. The paper also finds little evidence to show that environmental expenditures negatively impact on economic growth, although there is inconsistency between the ‘no effects’ finding of the competitiveness literature and the ‘negative effects’ finding of most of the productivity literature. Finally, the elasticity of expenditure with respect to income is found to be 1.2, lower than would be expected if the ‘environmental demand effect’ is significant in explaining the downward slope of the environmental Kuznets curve.     

Institutional spending policies: implications for future asset values and spending

University endowments, sovereign wealth funds, and foundations support spending. In this paper, we analyze how different spending policies affect future asset values and spending opportunities. We show that the covariance between the asset returns and the spending rate implied by the spending policy is important in this regard. Many of the spending policies used in practice aim at smoothing the spending level by letting current spending be a function of both current asset values and earlier spending levels. One feature of these types of spending policies is that the funds can be depleted. Depleted funds cannot support spending.     

Ad spending: maintaining market share

Accuracy in manufacturers' advertising budgeting is hampered by reliance on the case rate system, which ties budgets to sales. A better measure is a brand's market share compared with its share of voice (the brand's share of the total value of the main media exposure in that product category). New brands are often "investing" in the market: speaking in a louder voice than their market shares would justify. Popular brands are often "profit taking"--keeping their voices low but enjoying a disproportionately large market share. The interrelationship between market share and share of voice, with either "investing" or "profit taking" the desired result, is not usually considered when determining ad budgets. But as advertisers realize how market share can respond to advertising pressure through switches in the share of voice, this method of market testing should gain in importance.     

Health care spending accounts: a flexible solution for Canadian employers

Flexible benefits plans have grown more slowly in Canada than in the United States, largely because of certain legal and regulatory considerations. Health care spending accounts (HCSAs) provide a cost-effective way for Canadian employers to address the health care benefit needs of a diverse workforce. A flexible health care spending account is a versatile and cost-effective instrument that can be used by Canadian employers that wish to provide a full range of health care benefits to employees. The health care alternatives available through an HCSA can provide employees with an opportunity to customize and optimize their benefits program. Regulatory requirements that an HCSA must meet in order to qualify for available tax advantages are discussed, as are the range of health care services that may be covered.     

Ad spending: growing market share

If I yell louder but you yell even louder, the audience will hear you. So I shouldn't expect to be heard if I also start yelling louder, unless you become quieter. That, in essence, is the key to the relative share of voice effect in advertising. In most markets, consumer goods markets are in a state of equilibrium, where advertising expenditures are relatively stable and changes in market share are small. To gain ground in market share, a competitor has to launch a huge ad campaign for a sustained period that outspends the biggest rival by at least double.     

Immigration and local spending in social services: evidence from a massive immigration wave

The aim of this paper is to analyze the relationship between immigration and redistributive public spending by using the recent, massive arrival of immigrants in Spain. Specifically, we focus our analysis on the effect of 1998–2006 changes in local immigrant density on contemporaneous changes in municipal spending in social services. To address the potential endogenous location of immigrants, we adopt an instrumental variables approach that uses the distribution of rental housing in 1991 to predict the location of immigrant inflows. The results indicate that (per capita) social spending increased less in those municipalities that recorded the largest increases in immigrant density. We interpret our results as a reduction in natives’ demand for redistributive public spending.     

Gender bias in the spending of child benefits: evidence from a natural policy reform

We examine the causal relationship between child benefits and household spending on child and adult goods. In particular, we examine whether it matters if it is the husband or wife who controls this income transfer. We exploit the introduction of child benefits to families with at least four children. The law assigned the mother as the beneficiary but, when asked who collected the amount, one-third of beneficiary families reported the father as the recipient. We use the propensity score matching approach to assess the issue of possible self-selection of beneficiary families into answering who was the recipient parent and the results favour common support. We apply the difference-in-difference approach and find evidence in favour of a gender bias in the spending of child benefits. On average, after the reform, recipient families’ spending on child clothing, food and tobacco was significantly different from that of non-recipient families. Further analysis suggests that recipient families with the mother (father) in control of the amount spent more on child clothing and food (tobacco) relative to non-recipient families. The evidence has implications on the design of welfare programmes to benefit the children.     

Transitions in a globalising world

The increasing complexity of our global society means that sustainable development cannot be addressed from a single perspective or scientific discipline. By using the concept of transitions, we examine current and future tensions between welfare, well-being and the environment, and focus on four major issues that are of global importance: two of our key natural resources, water and biodiversity; the health of human populations; and the developments related to global tourism. In our global assessment, we base ourselves on the most recent scenario efforts of the Intergovernmental Panel on Climate Change (IPCC). Future developments are explored along the lines of four development paths (scenario groups), defined along two dimensions (global versus regional dynamics and emphasising economic objectives versus environmental and equity objectives.     

Rescuing drylands: a project for the world

Environmental hazards menace life-support systems in drylands worldwide; science and technology can play an important role in enabling the habitats and their people to cope with these. Desertification is a global issue, comparable to other generally-recognized global problems such as climate change, loss of biodiversity, and epidemic diseases. And desertification can be stopped, if science and technology are mobilized in the service of a determined international effort. Three global initiatives are essential: (1) a drought early-warning system; (2) international desertification research centers; and (3) an international program to develop water resource technologies.     

Fiscal reform and local spending: Lessons from Scotland

The poll tax is meant to promote accountability to the local electorate. However, the evidence from Scotland suggests that people vote for reasons other than to maximise their economic interests. If electoral pressures do not cause lower spending, will the Government turn again to crude forms of central control on local spending?     

Maintaining the roots of economic development in an era of globalized production

The globalization of economic activity is being driven by market processes. The market based indicators used to measure its progress mask serious and wide-spread economic problems that also undermine our economic future. Alternative indicators, designed to give a more accurate reading of our economic well being, are being developed, but more work and wider acceptance of the concepts are needed. An examination of economic theory reveals that there is no basis for the claims that market based guideposts and decision making lead to inherently superior results and provide support for the search for non-market criteria in the evaluation of economic development. The labor movement has long sought to establish international standards as one criterion of production. A review of the global approach of the ILO, the narrowly focused European Union agreements, and the treaty-based fair deal movement provides guidance for future directions for policy work.     

Sweden in the world: Some alternatives for a small state

This article summarises some studies of Sweden in the long-term international context, undertaken by the Swedish Secretariat for Future Studies. Four broad scenarios are presented; they contain international and domestic issues. They are then related to three images of Sweden that bring in solidarity with other countries, material wellbeing, and national and personal security. All these issues require public debate. The extent to which Sweden counts as a small state, and the implications of being one, are not clear-cut.     

Nominal contracting in a world of uncertainty

This paper evaluates corporate sensitivity to relative price risk and inflation risk and suggests how the existence of various nominal contracts, particularly debt and forward contracts, may modify firm behavior under uncertainty. By differentiating between the two types of price risk, this paper demonstrates the distinct risk reduction functions served by forward contracts and debt. Debt primarily protects against inflation risk whereas forward contracts can be used to protect against relative price risk. Complications arise, however, because forward contracts, which are denominated in nominal terms, also have an impact on the firm's degree of inflation risk.     

Where value lives in a networked world

While many management thinkers proclaim an era of radical uncertainty, authors Sawhney and Parikh assert that the seemingly endless upheavals of the digital age are more predictable than that: today's changes have a common root, and that root lies in the nature of intelligence in networks. Understanding the patterns of intelligence migration can help companies decipher and plan for the inevitable disruptions in today's business environment. Two patterns in network intelligence are reshaping industries and organizations. First, intelligence is decoupling--that is, modern high-speed networks are pushing back-end intelligence and front-end intelligence toward opposite ends of the network, making the ends the two major sources of potential profits. Second, intelligence is becoming more fluid and modular. Small units of intelligence now float freely like molecules in the ether, coalescing into temporary bundles whenever and wherever necessary to solve problems. The authors present four strategies that companies can use to profit from these patterns: arbitrage allows companies to move intelligence to new regions or countries where the cost of maintaining intelligence is lower; aggregation combines formerly isolated pieces of infrastructure intelligence into a large pool of shared infrastructure provided over a network; rewiring allows companies to connect islands of intelligence by creating common information backbones; and reassembly allows businesses to reorganize pieces of intelligence into coherent, personalized packages for customers. By being aware of patterns in network intelligence and by acting rather than reacting, companies can turn chaos into opportunity, say the authors.