{"title":"The catching up of the Hungarian economy in the European Union and Hungary’s falling behind among the post socialist member states","authors":"Gábor Gulácsi , Ádám Kerényi","doi":"10.1016/j.jge.2025.100148","DOIUrl":"10.1016/j.jge.2025.100148","url":null,"abstract":"<div><div>For decades Hungary, like the other post-socialist Central-Eastern European countries, followed a general policy of establishing and strengthening the institutions of democracy and a market economy. While Hungary initially benefited from the EU's convergence mechanisms, including access to the single market and cohesion funds, its long-term catching-up performance has lagged behind its regional peers. However, since the elections of 2010, when Viktor Orbán returned to power, Hungary has done dramatic changes. This study examines the complex interplay of factors that have shaped Hungary’s economic trajectory within the EU, focusing on two distinct periods: before 2010 and 2010–2023. Through international comparative analysis and country-specific hypotheses, the paper identifies critical governance failures and institutional weaknesses as primary reasons for Hungary's faltering convergence. In the early stages of Hungarian EU membership, the country’s economic development was hampered by a serious failure of governance of social-liberal parties which also triggered an excessive deficit procedure. After 2010 the functioning of the new illiberal government caused the country to lose ground in the economic catching-up process within the European Union. This setback has manifested through two institutional and two resource allocation-related symptoms, which can be traced back to a more fundamental explanation: the core institutional architecture and political objectives underpinning the Orbán model. Our findings underscore the ongoing tensions between Hungary’s domestic political agenda and the principles underpinning EU integration, raising concerns about Hungarian EU membership.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"18 ","pages":"Article 100148"},"PeriodicalIF":0.0,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144597357","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Can public participation in constitution-making curb corruption?","authors":"Jamie Bologna Pavlik , Andrew T. Young","doi":"10.1016/j.jge.2025.100140","DOIUrl":"10.1016/j.jge.2025.100140","url":null,"abstract":"<div><div>We employ “doubly robust” event studies and matching methods to explore whether public participation in Constitution-making can curb political corruption moving forward. Measures of public participation are drawn from the Constitutionalism and Democracy Database (CDD) (Eisenstadt et al., 2015, 2017a, 2017b) while corruption measures come from the Varieties of Democracy Project (V-Dem) (Coppedge et al., 2023; Pemstein et al., 2023). We generally report statistically insignificant effects. When estimates of public participation on corruption are significant – particularly for judicial corruption – they evidence small effects.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"17 ","pages":"Article 100140"},"PeriodicalIF":0.0,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144098955","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Editor’s note: Stability and development in Africa, tax reform, public participation and corruption","authors":"Zhangkai Huang, DavidDaokui Li","doi":"10.1016/j.jge.2025.100141","DOIUrl":"10.1016/j.jge.2025.100141","url":null,"abstract":"","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"17 ","pages":"Article 100141"},"PeriodicalIF":0.0,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143936130","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Does better governance abate the external debt–capital flight revolvement in sub-Saharan Africa?","authors":"Adamu Braimah Abille , Ishmael Adjei","doi":"10.1016/j.jge.2025.100136","DOIUrl":"10.1016/j.jge.2025.100136","url":null,"abstract":"<div><div>Most African countries are grappling with long-term fiscal slippages and escalating debt burdens due to high levels of non-concessional and overcapitalized borrowing. At the same time, the continent is paradoxically deemed a net creditor to the rest of the world owing to excessive capital flight. More concerning is the seemingly strong correlation between external debt and capital flight from these countries. While some studies have considered the moderating role of governance in the effect of capital flight on various sectors of African economies, how governance may moderate the correlation between external debt and capital flight remains empirically unexplored. Using unbalanced panel data on capital flight, external debt, and governance indicators from 1990 to 2020 for 20 African countries, we observe that; (i) the external debt–capital flight revolvement may be a short-run rather than a long-run phenomenon. (ii) The marginal effects show that improved governance indicators at least moderate the short-run positive correlation between external debt and capital flight. We discuss the policy implications.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"17 ","pages":"Article 100136"},"PeriodicalIF":0.0,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143455136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Does the limiting debt tax benefits curb tax aggressiveness? Evidence from Indonesia 2016 debt-to-equity reform","authors":"Timbul Parasian Hutahean , Wawan Hermawan , Bayu Kharisma , Alfiah Hasanah","doi":"10.1016/j.jge.2025.100139","DOIUrl":"10.1016/j.jge.2025.100139","url":null,"abstract":"<div><div>This study defines <em>tax aggressiveness</em> as the extent to which a firm uses interest expense to shield income from tax. Focusing on the period surrounding the debt-to-equity cap reform that restricts the debt tax benefit, we investigate two primary hypotheses: (1) whether thin capitalization, characterized by a higher debt ratio, is positively correlated with tax aggressiveness due to the debt tax benefit, and (2) whether the reform limiting this debt tax benefit (thin capitalization rule) reduces tax aggressiveness. We use the <em>simulated marginal tax rate</em> and the <em>kink</em> – the interest expense percentage at which the marginal tax benefit function curve begins to slope downward – as measures of tax aggressiveness. Applying OLS on a pooled sample from the pre-reform period, we find evidence supporting the first hypothesis. Furthermore, exploiting a natural experiment resulting from the reform and utilizing a difference-in-difference strategy on panel data, we observe that firms affected by the reform, particularly those classified as thinly capitalized, become relatively less tax-aggressive. A lower interest expenses ratio is evidence of a pathway for the finding. In conclusion, tax aggressiveness is associated with thinly capitalized firms, and the tax reform appears to mitigate this behavior.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"17 ","pages":"Article 100139"},"PeriodicalIF":0.0,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143868618","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Funding the future: Nigeria's battle against poverty through government expenditure","authors":"Temitope Adebayo","doi":"10.1016/j.jge.2025.100137","DOIUrl":"10.1016/j.jge.2025.100137","url":null,"abstract":"<div><div>This study investigates the effectiveness of government expenditure in combating the incidence of poverty in Nigeria from 1981 to 2022, employing a Vector Error Correction Model (VECM) framework. The research analyzes the relationship between poverty incidence and key variables including government expenditure, GDP per capita, Agricultural Credit Guarantee Scheme Fund (ACGSF), and gross enrollment ratio in secondary education. Using time series data and cointegration analysis, the study reveals a significant long-run relationship between government expenditure and poverty reduction, with a 1 % increase corresponding to a 0.05 percentage point reduction in poverty incidence. However, the error correction mechanism indicates a notably slow adjustment process (-0.000376), suggesting structural impediments to poverty reduction efforts. While government expenditure demonstrates significant poverty-reducing effects in the long run, the analysis reveals weak short-run dynamics and limited effectiveness of other policy instruments. The study finds evidence of a self-reinforcing poverty cycle, with past poverty levels significantly influencing current poverty rates. These findings underscore the need for more comprehensive and sustained policy interventions, particularly in addressing structural barriers to poverty reduction and improving the efficiency of government expenditure allocation in Nigeria's socioeconomic development initiatives.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"17 ","pages":"Article 100137"},"PeriodicalIF":0.0,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143601125","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Sinews of empire? The Crown Agents for the Colonies and African government debt under colonial rule","authors":"Leigh Gardner , Tehreem Husain","doi":"10.1016/j.jge.2025.100138","DOIUrl":"10.1016/j.jge.2025.100138","url":null,"abstract":"<div><div>In 1924, John Maynard Keynes complained about the fact that Southern Rhodesia, which he described as “a place somewhere in the middle of Africa”, was able to raise loans on the London market on the same terms as a large English borough. Existing literature on the “empire effect” has contended that investors did not discriminate between the bond issues of different colonies, either because they adopted similar economic and financial policies or because they were considered to be subsidiary governments to metropolitan states. However, archival records suggest that this was not the case and that African bonds were particularly unpopular. Contemporaries stressed that maintaining low borrowing costs for African colonies required considerable behind the scenes interventions by the Crown Agents using reserve funds they held on behalf of other colonies. This paper presents preliminary data on the financial connections between colonies created by this practice, which it calls the “sinews” of empire, and examines the implications for debates about imperialism and financial globalisation.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"17 ","pages":"Article 100138"},"PeriodicalIF":0.0,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143682642","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The contributions of foreign aid and natural resource wealth to democratic institutions: Evidence from over 40 years of sub-Sahara Africa's history","authors":"Alex O. Acheampong , John Taden","doi":"10.1016/j.jge.2024.100132","DOIUrl":"10.1016/j.jge.2024.100132","url":null,"abstract":"<div><div>This study evaluates the influence of natural resource rents and foreign aid on democracy using panel data from 45 SSA countries from 1980 to 2021. Using five different democracy indices, six different foreign aid variables and six different natural resource rent variables, our endogeneity-corrected results establish the following conclusions: (i) all the democracy indices respond positively and significantly to multilateral foreign aid, total development assistance committee (DAC) aid and bilateral aid from Australia, the USA, the United Nations, and the European Union (ii) the political resource curse, rentier and repression theories are valid for rent from mineral, gas and oil resources (iii) the democracy indices respond positively and significantly to rent from coal and forest resources (iv) the effect of foreign aid on the democracy indices is contingent on natural resource wealth (v) these findings are robust to an alternative econometric estimation technique and specifications. The policy implications are discussed.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"16 ","pages":"Article 100132"},"PeriodicalIF":0.0,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143097698","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Political determinants of centre-state transfers: An empirical analysis across Indian states","authors":"Deepti Kohli","doi":"10.1016/j.jge.2024.100130","DOIUrl":"10.1016/j.jge.2024.100130","url":null,"abstract":"<div><div>This paper focuses on the political aspect of intergovernmental transfers in India. By using a balanced panel data-set comprising of data on 28 Indian states and Union Territories for the period 2003–2023 for both Legislative Assembly and Parliamentary elections at the state-level, the aim is to investigate whether there occurs a politically motivated distribution of financial resources by the central government to the states in India? The analysis has been done for three categories of centre-state transfers: loans, grants and tax devolution. The regression estimations include various political controls such as, electoral competition between political parties, voter participation rate, government’s ideological leaning, centre-state partisan affiliation, government incumbency and a control for political lobbying. The findings of this study reveal a significant influence of various political forces on different categories of intergovernmental transfers in India. For instance, a greater political competition leads to a lowering of grants and a rise in tax devolution and loans provided by the central government in proportion to the state’s GDP. A left-leaning government ideology is found to entail an increase in the proportion of grants from the centre in proportion to the state’s GDP. In addition, a greater partisan affiliation between the central and state governments leads to an increase in the average proportion of grants and tax devolution provided to that state. Finally, an increase in the political contributions provided to the winning party in a state leads to a rise in the provision of loans and grants by the centre to that state, while tax devolution is dampened. All these results do provide some evidence in favour of electoral opportunism and lobbying at work in the distribution of financial resources across Indian states.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"16 ","pages":"Article 100130"},"PeriodicalIF":0.0,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143097723","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Long-term effects of deep institutional shocks: Historical evidence from Mexico","authors":"Shai Dothan , Mitja Kovac , Rok Spruk","doi":"10.1016/j.jge.2024.100128","DOIUrl":"10.1016/j.jge.2024.100128","url":null,"abstract":"<div><div>This paper examines the potential impact of institutional shocks on long-term development of property rights and on institutions regulating contracting. The paper seeks to demonstrate that the external institutional shocks might have an uncontemplated side-effect on the institutional development of Mexico. The analysis exploits the within-country variation in the presence of US administrative authorities during the Mexican-American conflict across Mexican states and cities. Using propensity score and nearest neighbour matching technique, we present some evidence of the potential long-term institutional implications of the presence of US administrative authorities. We show that the presence of US administrative authority generated an unexpected positive effect which could influence long-term property rights and contracting institutions of Mexican states. The positive impact of US administrative authorities’ presence are robust to a variety of specification checks and are particularly large for smaller cities.</div></div>","PeriodicalId":100785,"journal":{"name":"Journal of Government and Economics","volume":"16 ","pages":"Article 100128"},"PeriodicalIF":0.0,"publicationDate":"2024-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142700835","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}