Title:
THE EFFECT OF BUDGET STRUCTURE ON THE DEFICIT OF PUBLIC BUDGET AND ECONOMIC GROWTH: EVIDENCES FROM VIETNAM AND TAIWAN

Authors:
Shu-Hui Su, Jung-Ju Chou, Hsiu-Ling Lee* and Vo Tran Anh Huy , Taiwan

Abstract:
The purpose of this study is to investigate the relationships of public budget deficit and other relevant factors by examining the budget structure of Vietnam and Taiwan. This study involved a comparison, developing country and developed country, regarding to public expenditure and deficit for economic growth and aims to discover their effects on long run economic growth. The results of this study found a positive effect of the structure of revenues on the budget deficit. Tax revenue affects budget deficit stronger than Non-tax revenue. The results also showed that the structure of expenditure negatively affects budget deficit. Current expenditure had a significant relationship with budget deficit, compare to capital expenditure. Additionally, this study implied that there is a significantly positive effect of budget deficit on internal and external debt. The empirical evidence in this study suggested that the budget deficit has negative effects on economic growth. This study, therefore, not only contributes to the debate on the use fiscal policy to influence economic growth but also provide further empirical evidence on the influences of public budget structure.