Tài chính công, quản trị nhà nước và tăng trưởng kinh tế - Luận án tiến sĩ

1 MINISTRY OF EDUCATIONAL & TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY _________ NGUYEN PHUONG LIEN PUBLIC FINANCE, GOVERNANCE AND ECONOMIC GROWTH DOCTORAL DISSERTATION Ho Chi Minh City - 2018 2 MINISTRY OF EDUCATIONAL & TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY _________ NGUYEN PHUONG LIEN PUBLIC FINANCE, GOVERNANCE AND ECONOMIC GROWTH Specialization: Finance-Banking(Public Finance) Specialization code: 9340201 DOCTORAL DISSERTATION SUPERVISOR: Prof. SU DINH THANH Ho Chi Minh City - 2018 i COMMITMENT I commit that, throughout the whole process, I did this research based on ethical rules and laws for academic scientific research, including creating research ideas, conducting the literature review, collecting data, as well as the data analysis and research interpretation. In addition, I commit that I conducted this study by myself. The dissertation uses the data and analysis that I did by myself.

Committed by PhD student ii ACKNOWLEDGEMENTS First, I would like to express my deepest appreciation to my supervisor, Professor Sử Đình Thành, for his lectures as well as coaching me while I performed this research. Without his instructions and persistent support, this dissertation would not have been possible. Second, I would like to thank all UEH’s lecturers who instructed me in my research methods courses during my time as a Ph. student in the University of Economics, Ho Chi Minh City.

Trần Thị Tuấn Anh’s expert guidance was especially valuable for completing my research with clear and logical interpretations of the methodology. Third, I am also grateful to my parents, my young sisters, and my sons for their encouragement in my life. I also wish to express my endless thanks to my love for his sacrifice and daily care of me. Finally, last but by no means least, thank you to all my colleagues who shared with me their useful comments to help complete my publication.

iii TABLE OF CONTENT Table of Contents COMMITMENT. ii TABLE OF CONTENT. vii LIST OF TABLES. ix LIST OF FIGURES.

An overview of the status of global economies in the period 1996–2016. The differences of public finance and growth between developed and developing countries. Research objectives and research questions. Structure of dissertation .23 LITERATURE REVIEW AND HYPOTHESES DEVELOPMENT.

Some key concepts. Governance and corruption .3 Theoretical literature on the relationship between public finance and economic growth .1 Public choice theory. Cost-benefit theory of taxation. Economic growth theory: Exogenous and endogenous growth theory .4 Empirical literature on relationships among public finance, governance, and economic growth .1 Empirical literature on relationships between public finance, and economic growth.

Relationship between tax revenue and government expenditures .5 Designing the analytical framework and building hypotheses .58 METHODS AND RESEARCH DATA.1 Long-term linkages between public finance, and economic growth. 2 Tax revenue and expenditure relationship.3 Research data and its source. Determining appropriate variables and its sources .2 Collecting secondary data. 4 Check balance and essential test.

5 Choose appropriate analytical methods .79 PUBLIC FINANCE, GOVERNANCE, AND ECONOMIC GROWTH: A LONG RUN ANALYSIS. Long-run relationship between public finance and economic growth. Linkage between tax revenue and government expenditure. Results of examining role of governance in modifying effect between public finance and economic growth .1 The role of governance in modifying effect between public finance and economic growth in developing countries .2 The role of governance in modifying effect between public finance and economic growth in developed countries .93 CONCLUSION, IMPLICATION AND LIMITATION.

Suggestion to policy makers. Research limitation and future research .96 LIST OF AUTHOR’S PUBLICATION .1 List of studied countries. Description of variables. HT and IPS unit root test results (normal variables).

Results of co-integration test. Granger test results. Results of verification of governance role in modifying economic growth by SUR model. Results of verification of governance role in modifying economic growth by SGMM.

Robustness check with CPI .43 vii ABBREVIATIONS Words Meanings GDP Gross Domestic Products OECD Organization for Economic Co-operation and Development. RGDP Real GDP per capita LRGD Logarithm of Real GDP per capita Gexp Government expenditure Taxrev Total Tax revenue RE Random-Effects FE Fixed Effects OLS Ordinary Least Square SGMM System Generalized Method of Moments GMM Generalized Method of Moments SUR Seemingly Unrelated Regression EC Error Correction GLS Generalized Least Square 2SLS Two-stage Least Square HT Harris-Tzavalis (1999) test IPS Im-Pesaran-Shin (2003) test UEH University of Economics Ho Chi minh City USA United States of America US United States UK United Kingdom BI Business International Corporation ICRG International Countries Risk Guide WB World Bank IMF International Moneytary Fund viii UNDP United Nations Development Programme WDI World Development Indicators WGI World Governance Indicator WEO World Economic Outlook HDI Human Development Index CCI Control of corruption indicator CPI Corruption perception index ECM Error correction mechanism model TI Transparency International ix LIST OF TABLES 1.1: the global economic growth rebound .1: Description of variables ……………………………………….3: Results of unit root test for a panel with normal data for the whole sample in 1996-2016………………………………………………………….4: Results of unit root test for a panel with data of first different values for the whole sample in 1996-2016…………………………………… 84 6.5: Westerlund long-run cointegration test results (lrgdp)………… 85 7.6: Westerlund long-run cointegration test results (tax – exp)…….7: Pairwise Granger test results…………………………………….8: Westerlund long-run cointegration test results (lrgdp; Taxrev, and Gexp)………………………………………………………………………….9: The results of verification influence of corruption on public finance and economic growth in completely 82 developed and developing countries……………………………………………………………………… 91 11.10: The results of verification of the influence of corruption on public finance and economic growth in 44 developing countries…………….11: The results of verification of the influence of corruption on public finance and economic growth in 38 developed countries…………….12: Robustness check of the corruption role in all 82 countries, 44 developing countries, and 38 developed countries ……………………………97 x LIST OF FIGURES 1.1: The line trend of global per capita income growth and ratio of tax revenue and government spending in 1996 and 2016 in 38 developed countries.2: the line trend of global per capita income growth and ratio of tax revenue and government spending in 1996 and 2016 in 44 developing countries .3: the shrink frequency rate .4: Line trend of tax revenue – government expenditure – GDP per capita for whole sample in 1996-2016.5: Line trend of tax revenue – government expenditure – GDP per capita for 44 developing cuntries in 1996-2016 .6 : Line trend of tax revenue – government expenditure – GDP per capita for 38 developed cuntries in 1996-2016.7: The control of corruption indicators in 38 developed countries in 1996 and 2016 .8: The control of corruption indicators in 44 developing countries in 1996 and 2016 .1: Public sector in the economy………………………………… 26 10.2: Analytical framework of correlation of public fiance, corruption and economic growth. ………………………………………………… 54 xi Abstract: This study runs a co-integration and Granger causality tests that corroborate the existence of long-run co-integration linkages of public finance and economic growth and a bi-directional causal correlation between tax revenue and government expenditure. This finding suggests that to control deficits, a government’s decisions on collecting taxes and government expenditure should be simultaneous.

To verify the effects of governance represented by control of corruption on modifying the relationship between public finance and economic growth, this study applies a seemingly unrelated regressions model for the dataset, followed by a robustness check using a corruption perception index developed by the Transparency International organization. Measuring public finance by two factors: total tax revenue and general government expenditure helps this study to confirm the results, which reveal that the governance has a positive role in the economy. Additionally, the interaction between governance and tax revenue or government expenditure affects economy diversely depending on the different economic groups of developing and developed countries1. For instance, in developing countries, the interaction between public finance and governance always becomes a beneficial factor for growth.

While in developed countries, this interaction does not have any meaning with taxation. Therefore, it may increase the efficiency of government expenditure only. On the first side, the findings also suggest that developing countries should focus on governance in anti-corruption to increase the effectiveness of public finance and promote their economic growth. On the other hand, developed countries should make the decision on public finance separately with control of corruption.

1 In this study we call the “developed countries” are high-income countries, which were classified by World bank and determined as those with a GNI per capita, computed using the World Bank Atlas method. On 1 July 2015, high-income countries gained more than $12,736. This study also calls the “developing countries” are those countries were classified by World bank as seen as below. Low-income economies are determined as those with a GNI per capita of $1,045 or less in 2014; Lower-middle-income economies are those with a GNI per capita of more than $1,045 but less than $4, 125; and upper-middle-income economies are more than $4,125 but less than $12,736.

xii Keywords: long-term economic growth, co-integration test, governance, government expenditure, total tax revenue. JEL Classifications: O40, C52, D73, H20 Luận án đủ ở file: Luận án full