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Article

Public Authorities  

Gail Radford

Public authorities are agencies created by governments to engage directly in the economy for public purposes. They differ from standard agencies in that they operate outside the administrative framework of democratically accountable government. Since they generate their own operating income by charging users for goods and services and borrow for capital expenses based on projections of future revenues, they can avoid the input from voters and the regulations that control public agencies funded by tax revenues. Institutions built on the public authority model exist at all levels of government and in every state. A few of these enterprises, such as the Tennessee Valley Authority and the Port Authority of New York and New Jersey, are well known. Thousands more toil in relative obscurity, operating toll roads and bridges, airports, transit systems, cargo ports, entertainment venues, sewer and water systems, and even parking garages. Despite their ubiquity, these agencies are not well understood. Many release little information about their internal operations. It is not even possible to say conclusively how many exist, since experts disagree about how to define them, and states do not systematically track them. One thing we do know about public authorities is that, over the course of the 20th century, these institutions have become a major component of American governance. Immediately following the Second World War, they played a minor role in public finance. But by the early 21st century, borrowing by authorities constituted well over half of all public borrowing at the sub-federal level. This change means that increasingly the leaders of these entities, rather than elected officials, make key decisions about where and how to build public infrastructure and steer economic development in the United States

Article

High-Value Natural Resources and Transparency: Accounting for Revenues and Governance  

Levon Epremian, Päivi Lujala, and Carl Bruch

The increase in demand and prices of most high-value natural resources over the past five decades has resulted in massive income gains for resource-abundant countries. Paradoxically, many of these countries have suffered from slow economic growth, weak political institutions, and violent conflict. To combat corruption, increase accountability, and promote government effectiveness, the international community and advocacy groups have been promoting transparency as a remedy to the misappropriation and mismanagement of revenues. Consequently, advocates, officials, and diplomats increasingly focus on transparency as the means to better manage revenues from high-value natural resources in developing countries. The linkages between transparency, accountability, and management of revenues from high-value natural resources require careful examination. This article presents the issue of transparency and accountability in the context of natural resource revenue management, discusses how transparency is conceptualized and understood to function in this context, and assesses the existing evidence for the proposition that increased transparency leads to more accountability and improved natural resource governance. The article concludes with a discussion on the evaluation of transparency policy initiatives.

Article

Advertising and Journalism  

Corinna Lauerer

News is produced primarily to inform readers and viewers. However, audiences are charged only a fraction of the high production costs or not asked to pay at all. The reason is subsidy by advertising revenue. Since the beginning of professional journalism, news has been bundled with advertisements. This way, media companies can sell the attention of audiences attracted by journalistic content to advertising companies, which in return seek to attract consumers to their products and brands. Beyond distributing both simultaneously, advertising and journalism can intermingle, which causes ethical concerns. From a normative point of view, news and advertisements should be separated clearly in regard to the production process and the content itself. The separation of “church and state” or the “Chinese Wall” between the newsroom and the business side within a media company are commonly used metaphors used to express the ideal of separation. This principle aims to protect journalistic autonomy from economic influences such as advertising considerations. Nevertheless, advertising interests may influence journalism in different forms and to various degrees. They are regularly discussed as influence on journalistic selection of topics as well as writing style, and as the source of attempts to blend advertising and editorial content. Scholarly concerns are increasingly consumer oriented and less critical journalism, biased reporting on advertisers’ brands or products, and the potential deception of audiences, for example, when hybrid forms of advertising such as native ads camouflage their commercial nature. The relationship between journalism and advertising has been treated as an orphan compared to the relationship to public relations or politics. However, the media organizations’ struggles for sustainable business models in the 21st century fuel discussions in media economics and journalism studies about whether advertising is a blessing or curse to journalism. In a nutshell, the relationship between advertising and journalism is as long-standing as it is ambivalent (see “Evolution of the Relationship”). On the one hand, advertising revenue largely lays the financial foundation for prospering professional journalism (see “Funding Journalism”). On the other hand, this financial dependency causes potential threats to journalistic autonomy (see “Influencing Journalism”).

Article

State Fiscal Policy  

Alexis P. Tsoukalas

America’s individualistic national identity and regressive tax systems that favor corporations and the wealthy over everyday people have increasingly exacerbated inequality. Meanwhile, social welfare needs continue to outpace the resources governments employ to address them. While fiscal issues can be complex and opaque, holding governments accountable is imperative to counter long-standing oppression of those identifying as Black, Indigenous, and People of Color (BIPOC), women, immigrants, and others. How state governments, in particular, raise and expend revenue has a dramatic effect on the public, especially as the federal government continues to decentralize social welfare to the states. Social workers are uniquely equipped to influence this arena, given their person-in-environment view and having borne witness to the numerous ways misguided priorities have severely harmed those they are called to serve.

Article

Challenges in Financing Universal Health Coverage in Sub-Saharan Africa  

Diane McIntyre, Amarech G. Obse, Edwine W. Barasa, and John E. Ataguba

Within the context of the Sustainable Development Goals, it is important to critically review research on healthcare financing in sub-Saharan Africa (SSA) from the perspective of the universal health coverage (UHC) goals of financial protection and access to quality health services for all. There is a concerning reliance on direct out-of-pocket payments in many SSA countries, accounting for an average of 36% of current health expenditure compared to only 22% in the rest of the world. Contributions to health insurance schemes, whether voluntary or mandatory, contribute a small share of current health expenditure. While domestic mandatory prepayment mechanisms (tax and mandatory insurance) is the next largest category of healthcare financing in SSA (35%), a relatively large share of funding in SSA (14% compared to <1% in the rest of the world) is attributable to, sometimes unstable, external funding sources. There is a growing recognition of the need to reduce out-of-pocket payments and increase domestic mandatory prepayment financing to move towards UHC. Many SSA countries have declared a preference for achieving this through contributory health insurance schemes, particularly for formal sector workers, with service entitlements tied to contributions. Policy debates about whether a contributory approach is the most efficient, equitable and sustainable means of financing progress to UHC are emotive and infused with “conventional wisdom.” A range of research questions must be addressed to provide a more comprehensive empirical evidence base for these debates and to support progress to UHC.

Article

Tax Audits, Economics, and Racism  

Francine J. Lipman

Since 2010, Congress has significantly cut the annual budget of the Internal Revenue Service (IRS) while requiring the IRS to manage more responsibilities, including last-minute comprehensive tax reform, health care, broad-based antipoverty relief, and a variety of economic stimulus provisions. As a result, the IRS has sustained across-the-board decreases in staffing, with the most significant decreases in tax enforcement personnel. The IRS has fewer auditors than at any time since World War II, despite an explosion of concentrated income and wealth. Predictably, the tax gap, the difference between what taxpayers owe and what taxpayers pay, has skyrocketed to almost $1 trillion a year. Economists have estimated that funding the IRS will pay for itself severalfold, raising more than a trillion dollars of uncollected tax revenues over a decade. Despite evidence that funding will remedy budget shortfalls severalfold, Congress continues to defund the IRS. While the bulk of the tax gap is due to unreported income by high-income individuals, the audit rate of these households has dropped precipitously. By comparison, the lowest income wage earners are being audited five times more often than all other taxpayers. Given centuries of racist policies in the United States, households of color are disproportionately impoverished and white households are disproportionately wealthy. Accordingly, lower income working families of color, especially in the South, are audited at rates higher than their white northern counterparts. Moreover, because these households and the IRS have limited resources, many of these audits result in taxpayers losing antipoverty benefits that they have properly claimed. This discriminatory treatment is counter to Congressional intent to support these families and exacerbates existing racial income and wealth gaps. With President Biden’s 2021 executive order on advancing racial equity and support for underserved communities through the federal government, the U.S. Treasury, IRS, and Congress have been charged to “recognize and work to redress inequities in their policies and programs that serve as barriers to equal opportunity.” Properly funding the IRS is a necessary step to advancing racial equity.

Article

Fiscal Policy in the United States  

Karen M. Staller

U.S. fiscal policy is of interest to social workers as it concerns issues including structural racism, economic justice, and income inequality. U.S. fiscal policy refers to the role of the government in taxing and spending, the budget appropriations process, and public budgets (including federal and state revenue and spending). Federal revenue includes payroll and income taxes (personal and corporate). Federal outlays include discretionary and mandatory entitlement spending. There are a number of ongoing contentious debates about U.S. fiscal policy, including those involving the size and function of government, deficit financing and borrowing, inequality, and the redistribution of wealth in tax policies.

Article

Environmental Policy and the Double Dividend Hypothesis  

Antonio M. Bento

Since the 1990s, the so-called double-dividend debate—that is, the possibility that swaps of newly environmental taxes for existing distortionary taxes such as taxes on labor or capital could simultaneously improve environmental quality and reduce the distortionary costs of tax system—has attracted the attention of policymakers and academics. And while prior to the 1990s environmental economics as a field was not ready to inform this debate, scholars quickly moved to incorporate insights of the theory of second-best from public economics to inform the discussion. The result was a substantial advancement of the field of environmental economics, with the evaluation of the welfare effects of alternative policy instruments relying on general equilibrium models with pre-existing distortions. Initially, scholars casted substantially doubt on the prospects of a double dividend, and suggested that environmental tax reforms would not reduce the distortionary costs of the tax system. This is because studies documented that the tax-interaction effect dominated the revenue-recycling effect. That is, newly environmental taxes interact with pre-existing distortions in labor markets. And even when the revenues of environmental taxes are used to cut the rate of the labor tax, the environmental tax reform exacerbates, rather than alleviate, pre-existing distortions in labor markets. Throughout the 2000s and in more recent decades, the literature has documented many instances where a double dividend is more likely to exist, including in the context of developing countries.