THE SHORT-RUN EFFECTS OF FISCAL POLICY WITH USEFUL GOVERNMENT EXPENDITURE

This paper examines the short-run effects of changing government expenditure on output, consumption and employment. It attempts to combine the Public-Finance and macroeconomic approaches to the analysis of fiscal policy by introducing government expenditure which is 'useful' in consumption into an ISLM-type macro model which is derived from the singleperiod maximizing decisions of households and firms and which includes a government budget constraint.
The principal conclusion is that the effects of fiscal policy on output and employment depend on the 'efficiency' of government expenditure. The more efficiently government expenditure meets consumption needs, the less effective is fiscal policy to the point where the fiscal-policy multiplier may be negative.     

Fiscal policy with direct effects

This paper analyses the effects of fiscal policy in a model where government expenditure and tax changes affect household behaviour directly. This is shown to have implications for both the macroeconomic and welfare effects of changes in government spending.     

Community-Based Agencies as the Entrepreneur's Instruments of Control in Post-Soeharto's Indonesia

The shift of power in Indonesia, marked by the fall of the Soeharto regime in 1998, has brought changes to state industrial relations policies. One of these changes has been at the level of military involvement in dispute settlement, which has considerably declined since 1998. Eight years on, the liberty of factory owners to employ military personnel to contain labour activism has been considerably constrained. As a result, entrepreneurs have turned to civilian, community-based institutions and local personalities as an alternative avenue of labour control. Examination is made of evolving structures of extra-firm labour control in Tangerang, an industrial centre in the greater Jakarta area, where many local power-holders also own the lodgings rented by migrant manufacturing workers. It describes how their father–child relationship (a special extension of the patron–client relation in the Indonesian context) with their tenants gives them the persuasive capacity to appease discontented workers. This persuasive quality has proven to be even more effective than the coercive approach exercised by the military in the past. Examination is also made of the implications of these developments for industrial relations in the manufacturing sector.