scholarly journals Fiscal Rules for Natural Disaster- and Climate Change-Prone Small States

2021 ◽  
Vol 13 (6) ◽  
pp. 3135
Author(s):  
Ryota Nakatani
Keyword(s):  
Climate Change ◽  
Fiscal Policy ◽  
Natural Disasters ◽  
Natural Disaster ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
Policy Framework ◽  
Small States ◽  
Rule Based ◽  
Fiscal Rule

How should small states formulate a countercyclical fiscal policy to achieve economic stability and fiscal sustainability when they are prone to natural disasters, climate change, commodity price changes, and uncertain donor grants? We study how natural disasters and climate change affect long-term debt dynamics, and we propose cutting-edge fiscal policy rules. We find the primacy of a recurrent expenditure rule based on non-resource and non-grant revenue, interdependently determined by government debt and budget balance targets with expected disaster shocks. This innovative fiscal rule is classified as a natural disaster-resilient fiscal rule, which comprises a plethora of new advantages compared to existing fiscal rules. This new type of fiscal rule can be called as the third-generation fiscal rule. It encompasses natural disasters and climate change, uses budget data only, avoids the need for escape clauses, and operates on a timely basis. Our rule-based fiscal policy framework is practically applicable for many developing countries facing an increasing frequency and impact of devastating natural hazards, and climatic change.

scholarly journals A Possible Approach to Fiscal Rules in Small Islands — Incorporating Natural Disasters and Climate Change

2019 ◽  
Vol 2019 (186) ◽  
Author(s):  
Ryota Nakatani
Keyword(s):  
Climate Change ◽  
Developing Countries ◽  
Fiscal Policy ◽  
Natural Disasters ◽  
Pacific Islands ◽  
Fiscal Rules ◽  
Policy Framework ◽  
Small Island ◽  
Policy Dialogue ◽  
The Impact

A big challenge for the economic development of small island countries is dealing with external shocks. The Pacific Islands are vulnerable to natural disasters, climate change, commodity price changes, and uncertain donor grants. The question that arises is how should small developing countries formulate a fiscal policy to achieve economic stability and fiscal sustainability when prone to various shocks? We study how natural disasters affect long-term debt dynamics and propose fiscal policy rules that could help insulate the economy from such unexpected shocks. We propose fiscal rules to address these shocks and uncertainties using the example of Papua New Guinea. Our study finds the advantages of expenditure rules, especially a recurrent expenditure rule based on non-resource and non-grant revenue, interdependently determined by government debt and budget balance targets with expected disaster shocks. This paper contributes to the literature and policy dialogue by theoretically analyzing the impact of natural disasters on debt sustainability and proposing fiscal rules against natural disasters and climate changes. Our fiscal policy framework is practically applicable for many developing countries facing increasing frequency and impact of natural disasters and climate change. Our rules-based fiscal framework is crucial for sustainable and countercyclical macroeconomic policies to build resilience against devastating natural hazards.

scholarly journals Concept of Innovative Fiscal Policy: Theory and Empirical Evidence

Competitio ◽  
2020 ◽  
Vol 10 (2) ◽  
Author(s):  
Oliver Kovacs
Keyword(s):  
Fiscal Policy ◽  
Social Trust ◽  
Disruptive Innovation ◽  
Jel Classification ◽  
Fiscal Sustainability ◽  
Growth Potential ◽  
Fiscal Rules ◽  
Future Challenges ◽  
The Government ◽  
The One

This contribution addresses the question of what are the main constituents of an innovative fiscal policy in the context of sustainability. We apply the concept of sustaining and disruptive innovation to fiscal policy. On the one hand, innovative fiscal policy is able to be sustaining whereby public finance will incrementally improve without leaving its decisive structure. On the other hand, innovative fiscal policy should be disruptive as well in the context of long term sustainability, whereby the structure of public finances can be profoundly restructured as a reaction to future challenges. By using the Finnish recovery in the early 1990s, we can refine our argument about the use and necessity of the mixture of fiscal rules and independent institutions in favour of fiscal sustainability. We also shed light on the key sources of the expansionary consolidation that emerged in the aftermath of the fiscal adjustment in the early 1990s. We emphasise that innovative fiscal policy with a mixture of legislated fiscal rules and independent fiscal anchor is more likely to be associated with sustainability if the economy has weaker growth potential which does not provide enough social trust towards the consolidation efforts of the government. Journal of Economic Literature (JEL) classification: E61, E62, Q01

scholarly journals Do Fiscal Rules Constrain Fiscal Policy in Romania?

2020 ◽  
Author(s):  
Alina Daniela Vodă ◽  
Gabriela Dobrotă ◽  
Loredana Andreea Cristea ◽  
Bianca Ciocanea
Keyword(s):  
Sustainable Development ◽  
Fiscal Policy ◽  
Granger Causality ◽  
National Level ◽  
Granger Causality Test ◽  
Business Environment ◽  
Economic Life ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
Causality Test

At both macroeconomic and national level, in recent decades, European tax policies have shown a particular interest in addressing the spectrum of risk issues in terms of maturing the business environment and the lack of sustainable development of the economy. In Romania there has been a significant increase in public debt, which is increasingly threatening fiscal sustainability. This is due to fiscal rules that restrict the applicability of fiscal policy to balancing the national economy. However, fiscal policy did not act in the direction of economic recovery during the crisis that started in the last quarter of 2008, which had a negative impact on the Romanian business environment. Objectively, fiscal policy should manifest itself as a general framework of the economy on the basis of which to develop fiscal rules that act in the direction of sustainable development of the business environment and implicitly, of socio-economic life. The research carried out referred to identify how fiscal rules in Romania restrict the application of fiscal policy as well as whether there is an explicit concordance between them. The research methodology aimed to use the ARDL model to apply the Granger causality test, using quarterly data for a set of four indicators, being identified that Romanian fiscal rules restrict fiscal policy. The achieved results highlighted the fact that fiscal rules restrict fiscal policy, being identified a long-run relationship between the analyzed variables and implicitly, a state of instability of the fiscal system in Romania. Keywords: fiscal policy, autoregressive distributed-lagged model, Granger causality test.

Climate change, natural disasters and displacement: a multi-track approach to filling the protection gaps

2010 ◽  
Vol 92 (879) ◽  
pp. 713-730 ◽  
Author(s):  
Vikram Kolmannskog ◽  
Lisetta Trebbi
Keyword(s):  
Climate Change ◽  
Natural Disasters ◽  
Natural Disaster ◽  
Cross Border ◽  
Dynamic Interpretation

AbstractMillions are displaced by climate-related disasters each year, and this trend is set to increase as climate change accelerates. It raises important questions about how well existing instruments actually protect people driven from their homes by climate change and natural disasters. This article first examines current protection instruments and points out gaps in them. There follows an exploration of various proposals for filling those protection gaps, with the focus on cross-border natural-disaster-induced displacement. A multi-track approach is recommended, including context-oriented and dynamic interpretation of existing law, and creation of new law. Adhering to the principle of non-refoulement, and focusing on whether return is possible, permissible, or reasonable, could be a realistic way to begin developing protection regimes for victims of natural-disaster-induced displacement.

scholarly journals Enhancing Macroeconomic Resilience to Natural Disasters and Climate Change in the Small States of the Pacific

2015 ◽  
Vol 15 (125) ◽  
pp. 1 ◽  
Author(s):  
Ezequiel Cabezon ◽  
Leni Hunter ◽  
Patrizia Tumbarello ◽  
Kazuaki Washimi ◽  
Yiqun Wu ◽  
...  
Keyword(s):  
Climate Change ◽  
Natural Disasters ◽  
Small States ◽  
The Pacific

Small States Resilience to Natural Disasters and Climate Change - Role for the IMF

Policy Papers ◽  
2016 ◽  
Vol 16 ◽  
Author(s):  
Keyword(s):  
Climate Change ◽  
Natural Disasters ◽  
Annual Cost ◽  
Gdp Per Capita ◽  
Small States ◽  
Land Area ◽  
Macroeconomic Effects ◽  
Per Capita ◽  
The Imf

Small developing states are disproportionately vulnerable to natural disasters. On average, the annual cost of disasters for small states is nearly 2 percent of GDP—more than four times that for larger countries. This reflects a higher frequency of disasters, adjusted for land area, as well as greater vulnerability to severe disasters. About 9 percent of disasters in small states involve damage of more than 30 percent of GDP, compared to less than 1 percent for larger states. Greater exposure to disasters has important macroeconomic effects on small states, resulting in lower investment, lower GDP per capita, higher poverty, and a more volatile revenue base.

scholarly journals Fiscal Rules, Automatic Stabilizers and Discretionary Fiscal Actions: Analyzing an Emerging Economy

2015 ◽  
Vol 2 (2) ◽  
pp. 25
Author(s):  
Ricardo Ramalhete Moreira
Keyword(s):  
Fiscal Policy ◽  
Public Debt ◽  
Emerging Economy ◽  
Fiscal Rules ◽  
The Public ◽  
Vec Model ◽  
Fiscal Rule ◽  
Automatic Stabilizers

This article analyzes the nature of the fiscal rule in Brazil, over the period from January 2005 to July 2012, using a VEC model. The initial findings identify a (weak) fiscal rule, as nominal deficits react counter-cyclically to domestic public debt and inflation changes. However, when we isolate the discretionary component of the fiscal policy its pro-cyclical bias can be highlighted. The estimates contribute to understand the preliminary findings and why such a policy is not enough to impose a sustainable downturn movement on the public debt / GDP ratio in Brazil over the last years.

scholarly journals A Rule-Based Medium-Term Fiscal Policy Framework for Tanzania

2009 ◽  
Vol 09 (244) ◽  
pp. 1 ◽  
Author(s):  
Daehaeng Kim ◽  
Mika Saito ◽  
◽  
Keyword(s):  
Fiscal Policy ◽  
Policy Framework ◽  
Medium Term ◽  
Rule Based

scholarly journals Formation of Long-Term Fiscal Sustainability of Kazakhstan Using the Rule Structural Budget Balance

2021 ◽  
Vol 16 (3) ◽  
pp. 117-127
Author(s):  
S. N. Alpysbayeva ◽  
S. Zh. Shuneyev ◽  
N. N. Zhanakova ◽  
K. Beisengazin
Keyword(s):  
Fiscal Policy ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
Output Gap ◽  
Potential Gdp ◽  
The Government ◽  
Main Regulator ◽  
Adjustment System ◽  
Dynamic Series

The purpose of the study is to substantiate the potential of using the results of modeling potential GDP and estimating the output gap to comply with fiscal rules that are adequate for the corresponding economic cycle of the economy of Kazakhstan. The methods of economic, statistical, graphical, system, functional analysis, economic and mathematical modeling are applied. To achieve this goal, the analysis of Kazakhstan’s fiscal stability was carried out based on the assessment of Kazakhstan’s potential GDP and the calculation of output gaps, which were carried out based on the dynamic series method of the reported real GDP in 2005 prices for 1991-2019 using the Hodrick-Prescott filter (CP) using the EViews 10 econometric package. The current mechanism for using the output gap indicator in Kazakhstan’s fiscal policy does not have sufficient flexibility. For a timely response of the budget system to changes in the economic situation in the country or abroad, considering the output gap, it is important to introduce an automatic adjustment system that can eliminate contradictions and inconsistencies when making macroeconomic policy decisions by the main regulator and the government of the country. To do this, there is a need to revise the existing fiscal policy based on building a system of new budget rules on countercyclical principles. The proposed alternative fiscal model with the introduction of the rule on the structural balance of the budget is aimed at ensuring long-term fiscal stability, which does not allow for a pro-cyclical policy.

Gender and Disaster: The Impact of Natural Disasters on Violence Against Women in Nepal

2021 ◽  
pp. 002190962110624
Author(s):  
Tamsin Bradley ◽  
Zara Martin ◽  
Bishnu Raj Upreti ◽  
Bashnu Subedu ◽  
Sumeera Shrestha
Keyword(s):  
Climate Change ◽  
Natural Disasters ◽  
Natural Disaster ◽  
Violence Against Women ◽  
Quantitative Data ◽  
Gendered Violence ◽  
Qualitative And Quantitative ◽  
Adverse Impacts ◽  
The Impact ◽  
Climate Disasters

In April 2015, a 7.8 magnitude earthquake hit the Gorkha district of Nepal. This was followed in May by a second earthquake. Nepal experienced another natural disaster in 2017. Floods affected large swathes of the country from east to west. Using both qualitative and quantitative data, this article examines the impact of these climate disasters on violence against women. In doing so, it adds to a small but growing and fundamentally important body of literature that explores the intersections of gendered violence and natural disaster. It is well-established that 35% of women worldwide have experienced physical and/or sexual violence. What we know much less about is how other events impact on these figures. Given the growing intensity of climate change and the reality that adverse impacts are here to stay, understanding the detrimental legacy of natural disasters is now more urgent than ever.

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