The Counter-Cyclical Fiscal Role of State Governments During the 'Thirties

Sharp, Ansel M.

doi:10.1086/ntj41790720

Cited by 2 publications

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“…The counter-cyclical role of the state is driven by the government’s fiscal power to put counter-cyclical measures in place. In accordance with the counter-cyclical role of the state, ‘government spending should be increased during contractionary periods and decreased during expansionary periods’ (Sharp, 1958: 139). An increase in government spending refers to an expansionary fiscal policy, which is influenced by domestic and global economic conditions.…”

Section: The Counter-cyclical Role Of the Statementioning

confidence: 99%

“…The counter-cyclical fiscal policy role of the state was evident in the increased state expenditure seen during the Great Depression of 1929 and the early 1930s where the aim was to stimulate economic recovery while also protecting the citizens from stagnating into deplorable poverty (Snell, 2009). Spending in America was at its highest when the economic activity was at its lowest, based on the 1929 constant prices (Sharp, 1958). This is evidence of the counter-cyclical role of the state in keeping the supply and demand sides of the economy afloat when periodic economic volatilities undermine the financial position of the general population.…”

Section: The Counter-cyclical Role Of the Statementioning

confidence: 99%

“…Without an improved financial base, local governments will have to lower their spending in relation to a decline in their revenues; yet, the central government has the power to increase its spending even in the face of an economic downturn due to its diverse revenue structures (Snell, 2009). Sharp (1958) noted that the capacity of local governments to withstand the Great Depression depended on the counter-cyclical role of the federal government.…”

Section: The Counter-cyclical Role Of the Statementioning

confidence: 99%

“…Given that the local government sphere is at the forefront of service delivery, its institutional capacity has required additional financial support during the pandemic. As was seen during the Great Depression, while the aggregate demand for economic activities tends to be low during an economic contraction, the aggregate demand for services provided by the local government increases (Sharp, 1958). Similarly, the adverse socio-economic impacts of the pandemic led to a rise in the demand for local government services and necessitated increased institutional and fiscal capacity of municipalities.…”

Section: The Counter-cyclical Role Of the State In South Africamentioning

confidence: 99%

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COVID-19 and the Counter-cyclical Role of the State in South Africa

Khambule

2021

Progress in Development Studies

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The COVID-19 pandemic has disrupted social and economic activities across the world, resulting in the contraction of national economies and the global economy, causing an unprecedented loss of employment. The pandemic’s detrimental impact has meant that governments have to play an interventionist role to mitigate the staggering social and economic effects of the COVID-19 lockdown on sustainable development. In light of the damaging impact of the pandemic on the economy, employment and poverty, this article assesses the socio-economic contribution and effectiveness of the counter-cyclical policies in mitigating the socio-economic impact of COVID-19 in South Africa. Methodologically, the article used secondary qualitative and quantitative data to assess the government’s fiscal and monetary measures. The findings suggest that South Africa adopted extensive counter-cyclical fiscal and monetary policies, such as increased government spending on social and economic public goods, tax relief, interest rate cuts and job protection measures. While these counter-cyclical measures had some degree of effectiveness, they were undermined by the lack of comprehensively targeted measures for low-income households. This article argues that the country needs to find proactive ways of managing its counter-cyclical fiscal measures to ensure a higher degree of effectiveness and economic stabilization to reach those in greatest need.

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Section: The Counter-cyclical Role Of the Statementioning

confidence: 99%

Section: The Counter-cyclical Role Of the Statementioning

confidence: 99%

Section: The Counter-cyclical Role Of the Statementioning

confidence: 99%

Section: The Counter-cyclical Role Of the State In South Africamentioning

confidence: 99%

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COVID-19 and the Counter-cyclical Role of the State in South Africa

Khambule

2021

Progress in Development Studies

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Local Budget Resilience in Times of COVID-19 Crisis: Evidence from Indonesia

et al. 2022

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The COVID-19 pandemic has put immense pressure on the fiscal situation. Central revenues have decelerated while expenditures had to be increased to facilitate economic recovery. Local governments faced even harder challenges as intergovernmental transfers were reduced and room for mobilizing alternative finances was limited. This paper employs qualitative and secondary data analysis on local budget and fiscal capacities at the subnational level in Indonesia to find insights into the implications and responses of the provincial government in a decentralized economy during the pandemic. Provinces with a high dependence on intergovernmental transfer are struggling to adopt a countercyclical mitigative fiscal policy. However, provinces with high local own-source revenue have suffered the most during the crisis as low economic activity reduced tax revenues and indirectly lead to lower fiscal space. As fiscal policy is critical to containing the pandemic and facilitating recovery, this paper proposes several strategies toward a more sustainable fiscal policy for rebuilding local government capacity in the medium-to-long term in the aftermath of the crisis.

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The Counter-Cyclical Fiscal Role of State Governments During the 'Thirties

Cited by 2 publications

References 0 publications

COVID-19 and the Counter-cyclical Role of the State in South Africa

COVID-19 and the Counter-cyclical Role of the State in South Africa

Local Budget Resilience in Times of COVID-19 Crisis: Evidence from Indonesia

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