Impact of Fiscal Decentralization on Non-Oil Economic Growth in a ResourceRich Economy

Hasanov, Fakhri; Mikayilov, Ceyhun; Yusifov, Sebuhi; Aliyev, Khatai

doi:10.17015/ejbe.2016.017.06

Cited by 15 publications

(12 citation statements)

References 40 publications

(54 reference statements)

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“…The question of whether this oil abundance is a “curse” or a “blessing” has been examined by Hasanov (2010) , who emphasizes that oil revenues mainly go to the nontradable sector. Further studies (e.g., Aliyev, 2019 , Aliyev and Mikayilov, 2016 , Aliyev and Nadirov, 2016 , Aliyev et al, 2016 , Dehning et al, 2016 , Gurbanov et al, 2017 , Hasanov, 2013b , Hasanov and Alirzayev., 2016 , Hasanov et al, 2016 , Hasanov et al, 2018 ) confirm that (oil revenue-financed) government expenditures have a positive impact on economic growth in the non-oil sector in Azerbaijan. Huseynov and Ahmadov (2013) provide a theoretical framework for this effect in an oil-exporting country and show that the procyclicality of fiscal policy is the major transmission channel of oil price shocks to the rest of the economy.…”

Section: Background On Azerbaijanmentioning

confidence: 86%

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

Zulfigarov

Neuenkirch

2020

Economic Systems

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Section: Background On Azerbaijanmentioning

confidence: 86%

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

Zulfigarov

Neuenkirch

2020

Economic Systems

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“…The technique is consisted of the following stages: (1) construction of an unrestricted ECM, (2) testing existence of cointegrating relationship or long-run association by using Wald-test (or the F-Test), (3) calculating the long-run coefficients by applying Bewley (1979) transformation if existence of cointegrating relationship among the variables is approved, (4) calculating long-run residuals and re-estimating the model by substituting long-run regressors by one lagged residuals. Detailed description of the estimation procedure is available in Pesaran et al (2001) as well as Hasanov et al (2016).…”

Section: Methodsmentioning

confidence: 99%

Testing Wagner's Law and Keynesian Hypothesis in Selected Post-Soviet Countries

Abbasov¹,

Aliyev²

2018

Acta Univ. Agric. Silvic. Mendelianae Brun.

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The aim of this research is to test Wagner’s law and Keynesian hypothesis in 9 Post‑Soviet countries – Estonia, Latvia, Lithuania, Uzbekistan, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, and Ukraine. For this purpose, long‑ and short‑run causality between real per capita GDP and real per capita government expenditures are estimated by employing ARDL modelling approach. Estimation results support validity of Wagner’s law for Latvia, Lithuania, Uzbekistan, Georgia, Kyrgyz Republic and Ukraine, and validity of Keynesian hypothesis for Estonia, Uzbekistan, Azerbaijan, Kyrgyz Republic, and Moldova in the long‑run. Meanwhile, research findings indicate strong bidirectional short‑run causality in all countries except Lithuania and Kyrgyz Republic in the short‑run.

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“…Moreover, the state budget expenditures for social-cultural activities and other expenses have positive-significant and negative-significant effect, respectively in their model. Hasanov et al (2016) also have studied the dependence of non-oil GDP on the non-oil employment, capital stock, total government revenues, total government expenditure, local government revenues and local government expenditure. They found that the effect of local government expenditures on non-oil GDP is negative and statistically significant at 10% significance level.…”

Section: Source: Own Compilationmentioning

confidence: 99%

Does the COVID19 pandemic change the relationship between government expenditures and economic growth in Azerbaijan?

Abbasov¹,

Gulaliyev²,

Ahmadov³

et al. 2021

Economics &Amp; Sociology

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This paper investigates the impact of the Government's capital and current expenditures on economic growth in Azerbaijan. The estimation strategy of the research consists of two directions. First, all estimation approaches were used for the period of 2005Q1-2019Q4. The estimated model for this period is called Model 1. Second, the model which is called Model 2 was estimated for whole period of 2005Q1-2021Q1. This approach allows comparing the role of the Government expenditures on non-oil economic activity in normal times and during the COVID-19 pandemic in Azerbaijan. Estimations show that coefficients characterizing the impact of Government current expenditures and capital expenditures on non-oil economic growth are almost the same for both periods. Therefore, we can state that COVID-19 pandemic did not affect the structure of the relationship between Government expenditures and non-oil economic growth. Results show that 1 percent increase in capital and current expenditures of state budget increases the real non-oil GDP by 0.10 and 0.40 percentage points, respectively. Accordingly, both capital and current expenditures of the state budget have positive impact on the real non-oil GDP growth for the both periods. This is in contrast to findings in the literature, which argue that increasing current expenditures financed by tax hikes lead to a lagged decrease in private investment, having an overall negative impact on economic growth. We attribute this opposing finding to the Azerbaijani state budget revenue system, which is financed by transfers from the State Oil Fund (Stabilization Fund). Thus, large government investment and social projects mostly rely on non-tax sources. Therefore, we argue that positive impact of capital and current expenditures of government budget on non-oil GDP seems plausible for Azerbaijan. Another result of our estimation is that expansion of economic openness accompanied by non-oil economic growth plunge in Azerbaijan. We interpret this phenomenon with very low share of non-oil export, where openness is mostly caused by increase in import volume.

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Impact of Fiscal Decentralization on Non-Oil Economic Growth in a ResourceRich Economy

Abstract: The

Cited by 15 publications

References 40 publications

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

The impact of oil price changes on selected macroeconomic indicators in Azerbaijan

Testing Wagner's Law and Keynesian Hypothesis in Selected Post-Soviet Countries

Does the COVID19 pandemic change the relationship between government expenditures and economic growth in Azerbaijan?

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