Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit

The author aims to empirically determine the significant factors that affect the levels of budget deficits of central governments across time and across countries. He empirically tests two prominent theories of budget deficits-the Barro (1979) tax-...

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Main Author:	Chen, Derek Hung Chiat
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTING BALANCED BUDGETS BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICIT REDUCTION BUDGET DEFICITS BUDGET SURPLUS CAPACITY BUILDING CENTRAL GOVERNMENT CENTRAL GOVERNMENT BUDGETS CENTRAL GOVERNMENTS CITIZENS CLOSED ECONOMY CONSTANT RETURNS TO SCALE DEBT FINANCING DISTRIBUTION OF INCOME DISTRIBUTION OF WEALTH ECONOMIC BOOM ECONOMIC GROWTH ECONOMIC THEORY EXOGENOUS VARIABLES FEDERAL GOVERNMENT FISCAL FISCAL DEFICIT FISCAL DEFICITS FISCAL ILLUSION FISCAL POLICY FISCAL YEAR GDP GINI COEFFICIENT GNP GOVERNMENT BONDS GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT SPENDING GROWTH RATE INCOME INCOME DISTRIBUTION INFLATION INFLATION RATE INSTITUTIONAL ARRANGEMENTS INTEREST RATE INTEREST RATES LEVELS OF GOVERNMENT LOCAL GOVERNMENT MACROECONOMIC CONDITIONS MAJORITY RULE MONEY INCOME NATIONAL GOVERNMENTS OPEN ECONOMIES OPTIMIZATION OVERLAPPING GENERATIONS MODEL POLITICAL ECONOMY PRESENT VALUE PRODUCTION FUNCTION PRODUCTIVITY PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCE THEORY PUBLIC GOODS PUBLIC SECTOR RANDOM WALK REDISTRIBUTIVE EFFECTS REGRESSION ANALYSES RETIREMENT RETURN ON ASSETS SAVINGS SIZE OF GOVERNMENT SOCIAL SECURITY TAX TAX ADMINISTRATION TAX AUTHORITIES TAX BURDEN TAX COLLECTION TAX COLLECTIONS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAXATION TIME SERIES VOTERS WAGE RATES WAGES WEALTH BUDGET DEFICITS INTERTEMPORAL LAW (INTERNATIONAL LAW) CROSS-COUNTRY EXPERIENCE TAX SYSTEMS TAX SUBSIDIES ECONOMETRIC MODELS MISSING OBSERVATIONS (STATISTICS) DATA ANALYSIS POVERTY REDUCTION WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2003/06/2427516/intertemporal-excess-burden-bequest-motives-budget-deficit http://hdl.handle.net/10986/18179

id	okr-10986-18179
recordtype	oai_dc
spelling	okr-10986-181792021-04-23T14:03:41Z Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit Chen, Derek Hung Chiat ACCOUNTING BALANCED BUDGETS BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICIT REDUCTION BUDGET DEFICITS BUDGET SURPLUS CAPACITY BUILDING CENTRAL GOVERNMENT CENTRAL GOVERNMENT BUDGETS CENTRAL GOVERNMENTS CITIZENS CLOSED ECONOMY CONSTANT RETURNS TO SCALE DEBT FINANCING DISTRIBUTION OF INCOME DISTRIBUTION OF WEALTH ECONOMIC BOOM ECONOMIC GROWTH ECONOMIC THEORY EXOGENOUS VARIABLES FEDERAL GOVERNMENT FISCAL FISCAL DEFICIT FISCAL DEFICITS FISCAL ILLUSION FISCAL POLICY FISCAL YEAR GDP GINI COEFFICIENT GNP GOVERNMENT BONDS GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT SPENDING GROWTH RATE INCOME INCOME DISTRIBUTION INFLATION INFLATION RATE INSTITUTIONAL ARRANGEMENTS INTEREST RATE INTEREST RATES LEVELS OF GOVERNMENT LOCAL GOVERNMENT MACROECONOMIC CONDITIONS MAJORITY RULE MONEY INCOME NATIONAL GOVERNMENTS OPEN ECONOMIES OPTIMIZATION OVERLAPPING GENERATIONS MODEL POLITICAL ECONOMY PRESENT VALUE PRODUCTION FUNCTION PRODUCTIVITY PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCE THEORY PUBLIC GOODS PUBLIC SECTOR RANDOM WALK REDISTRIBUTIVE EFFECTS REGRESSION ANALYSES RETIREMENT RETURN ON ASSETS SAVINGS SIZE OF GOVERNMENT SOCIAL SECURITY TAX TAX ADMINISTRATION TAX AUTHORITIES TAX BURDEN TAX COLLECTION TAX COLLECTIONS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAXATION TIME SERIES VOTERS WAGE RATES WAGES WEALTH BUDGET DEFICITS INTERTEMPORAL LAW (INTERNATIONAL LAW) CROSS-COUNTRY EXPERIENCE TAX SYSTEMS TAX SUBSIDIES ECONOMETRIC MODELS MISSING OBSERVATIONS (STATISTICS) CENTRAL GOVERNMENT DATA ANALYSIS POVERTY REDUCTION BUDGET DEFICITS WEALTH The author aims to empirically determine the significant factors that affect the levels of budget deficits of central governments across time and across countries. He empirically tests two prominent theories of budget deficits-the Barro (1979) tax-smoothing approach, and the still-untested theory of negative bequest motives advocated by Cukierman and Meltzer (1989). The author uses econometric techniques including fixed-effects (both country and time) panel regressions spanning 87 countries over the period 1975 to 1992, and the Griliches treatment of missing data. The author finds relatively stronger statistical support for the tax-smoothing approach among developing countries but not in industrial countries. The existence of empirical evidence supporting the theory of negative bequest motives is indeterminate. The author also conducted post-regression analyses to assess the proportion of observed differences in budget deficits the factors were actually able to explain. These reveal that both theories are generally weak in accounting for inter-temporal changes in budget deficit shares for both industrial and developing countries. The theories performed significantly better in accounting for cross-section differences. The author has many contributions to the literature. First, he analyzes the question of what determines the size of central government budget deficits using cross-country time series data leading into the 1990s. Second, he provides empirical tests of the still-untested Cukierman-Meltzer (1989) negative bequest motive theory of budget deficits. By using the panel data, the author attempts to determine the factors that influence not only the inter-temporal differences in budget deficits but also those factors that lead to cross-country differences. Last but not least, he provides some preliminary evidence that poverty reduction is necessary for long-term government budget deficit reduction. 2014-05-05T20:42:11Z 2014-05-05T20:42:11Z 2003-06 http://documents.worldbank.org/curated/en/2003/06/2427516/intertemporal-excess-burden-bequest-motives-budget-deficit http://hdl.handle.net/10986/18179 English en_US Policy Research Workding Paper;No. 3086 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCOUNTING BALANCED BUDGETS BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICIT REDUCTION BUDGET DEFICITS BUDGET SURPLUS CAPACITY BUILDING CENTRAL GOVERNMENT CENTRAL GOVERNMENT BUDGETS CENTRAL GOVERNMENTS CITIZENS CLOSED ECONOMY CONSTANT RETURNS TO SCALE DEBT FINANCING DISTRIBUTION OF INCOME DISTRIBUTION OF WEALTH ECONOMIC BOOM ECONOMIC GROWTH ECONOMIC THEORY EXOGENOUS VARIABLES FEDERAL GOVERNMENT FISCAL FISCAL DEFICIT FISCAL DEFICITS FISCAL ILLUSION FISCAL POLICY FISCAL YEAR GDP GINI COEFFICIENT GNP GOVERNMENT BONDS GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT SPENDING GROWTH RATE INCOME INCOME DISTRIBUTION INFLATION INFLATION RATE INSTITUTIONAL ARRANGEMENTS INTEREST RATE INTEREST RATES LEVELS OF GOVERNMENT LOCAL GOVERNMENT MACROECONOMIC CONDITIONS MAJORITY RULE MONEY INCOME NATIONAL GOVERNMENTS OPEN ECONOMIES OPTIMIZATION OVERLAPPING GENERATIONS MODEL POLITICAL ECONOMY PRESENT VALUE PRODUCTION FUNCTION PRODUCTIVITY PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCE THEORY PUBLIC GOODS PUBLIC SECTOR RANDOM WALK REDISTRIBUTIVE EFFECTS REGRESSION ANALYSES RETIREMENT RETURN ON ASSETS SAVINGS SIZE OF GOVERNMENT SOCIAL SECURITY TAX TAX ADMINISTRATION TAX AUTHORITIES TAX BURDEN TAX COLLECTION TAX COLLECTIONS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAXATION TIME SERIES VOTERS WAGE RATES WAGES WEALTH BUDGET DEFICITS INTERTEMPORAL LAW (INTERNATIONAL LAW) CROSS-COUNTRY EXPERIENCE TAX SYSTEMS TAX SUBSIDIES ECONOMETRIC MODELS MISSING OBSERVATIONS (STATISTICS) CENTRAL GOVERNMENT DATA ANALYSIS POVERTY REDUCTION BUDGET DEFICITS WEALTH
spellingShingle	ACCOUNTING BALANCED BUDGETS BUDGET CONSTRAINT BUDGET DEFICIT BUDGET DEFICIT REDUCTION BUDGET DEFICITS BUDGET SURPLUS CAPACITY BUILDING CENTRAL GOVERNMENT CENTRAL GOVERNMENT BUDGETS CENTRAL GOVERNMENTS CITIZENS CLOSED ECONOMY CONSTANT RETURNS TO SCALE DEBT FINANCING DISTRIBUTION OF INCOME DISTRIBUTION OF WEALTH ECONOMIC BOOM ECONOMIC GROWTH ECONOMIC THEORY EXOGENOUS VARIABLES FEDERAL GOVERNMENT FISCAL FISCAL DEFICIT FISCAL DEFICITS FISCAL ILLUSION FISCAL POLICY FISCAL YEAR GDP GINI COEFFICIENT GNP GOVERNMENT BONDS GOVERNMENT BUDGET GOVERNMENT BUDGET DEFICIT GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT SPENDING GROWTH RATE INCOME INCOME DISTRIBUTION INFLATION INFLATION RATE INSTITUTIONAL ARRANGEMENTS INTEREST RATE INTEREST RATES LEVELS OF GOVERNMENT LOCAL GOVERNMENT MACROECONOMIC CONDITIONS MAJORITY RULE MONEY INCOME NATIONAL GOVERNMENTS OPEN ECONOMIES OPTIMIZATION OVERLAPPING GENERATIONS MODEL POLITICAL ECONOMY PRESENT VALUE PRODUCTION FUNCTION PRODUCTIVITY PUBLIC DEBT PUBLIC EXPENDITURE PUBLIC FINANCE PUBLIC FINANCE THEORY PUBLIC GOODS PUBLIC SECTOR RANDOM WALK REDISTRIBUTIVE EFFECTS REGRESSION ANALYSES RETIREMENT RETURN ON ASSETS SAVINGS SIZE OF GOVERNMENT SOCIAL SECURITY TAX TAX ADMINISTRATION TAX AUTHORITIES TAX BURDEN TAX COLLECTION TAX COLLECTIONS TAX RATE TAX RATES TAX REVENUE TAX REVENUES TAXATION TIME SERIES VOTERS WAGE RATES WAGES WEALTH BUDGET DEFICITS INTERTEMPORAL LAW (INTERNATIONAL LAW) CROSS-COUNTRY EXPERIENCE TAX SYSTEMS TAX SUBSIDIES ECONOMETRIC MODELS MISSING OBSERVATIONS (STATISTICS) CENTRAL GOVERNMENT DATA ANALYSIS POVERTY REDUCTION BUDGET DEFICITS WEALTH Chen, Derek Hung Chiat Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit
relation	Policy Research Workding Paper;No. 3086
description	The author aims to empirically determine the significant factors that affect the levels of budget deficits of central governments across time and across countries. He empirically tests two prominent theories of budget deficits-the Barro (1979) tax-smoothing approach, and the still-untested theory of negative bequest motives advocated by Cukierman and Meltzer (1989). The author uses econometric techniques including fixed-effects (both country and time) panel regressions spanning 87 countries over the period 1975 to 1992, and the Griliches treatment of missing data. The author finds relatively stronger statistical support for the tax-smoothing approach among developing countries but not in industrial countries. The existence of empirical evidence supporting the theory of negative bequest motives is indeterminate. The author also conducted post-regression analyses to assess the proportion of observed differences in budget deficits the factors were actually able to explain. These reveal that both theories are generally weak in accounting for inter-temporal changes in budget deficit shares for both industrial and developing countries. The theories performed significantly better in accounting for cross-section differences. The author has many contributions to the literature. First, he analyzes the question of what determines the size of central government budget deficits using cross-country time series data leading into the 1990s. Second, he provides empirical tests of the still-untested Cukierman-Meltzer (1989) negative bequest motive theory of budget deficits. By using the panel data, the author attempts to determine the factors that influence not only the inter-temporal differences in budget deficits but also those factors that lead to cross-country differences. Last but not least, he provides some preliminary evidence that poverty reduction is necessary for long-term government budget deficit reduction.
format	Publications & Research :: Policy Research Working Paper
author	Chen, Derek Hung Chiat
author_facet	Chen, Derek Hung Chiat
author_sort	Chen, Derek Hung Chiat
title	Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit
title_short	Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit
title_full	Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit
title_fullStr	Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit
title_full_unstemmed	Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit
title_sort	intertemporal excess burden, bequest motives, and the budget deficit
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2003/06/2427516/intertemporal-excess-burden-bequest-motives-budget-deficit http://hdl.handle.net/10986/18179
_version_	1764439070609506304

Intertemporal Excess Burden, Bequest Motives, and the Budget Deficit

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