Does the surplus of lottery substitute the social welfare expenditure of local governments?

• Main Authors: Hsiu-chin Liu, 劉秀卿
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2006
• Online Access: http://ndltd.ncl.edu.tw/handle/77024154523339641722

碩士 === 逢甲大學 === 財稅所 === 94 === In recent years, the reasons of the popularity in issuing lottery may be due to not only the entertainment of buying lottery but also an increase in government revenue and the painlessness of paying tax in term of purchasing lotto. Taiwan lottery was issued in 2002. The surplus of Taiwan lottery is distributed into three areas: 50% of the surplus is earmarked as the social welfare expenditure of the counties/cities government, 45% as the preparation of National Pension Fund, and the rest of 5% as the revenue of National Health Insurance. Many problems are found on the use of the surplus as the local social welfare expenditure. Most of local governments regard this earmarked surplus as additional revenues and free to use in any way. Some of the surplus may be used to substitute the budget that should be originally compiled, to fill the gap of local fiscal deficit, or to finance general programs in stead of social welfare projects. The most common situation is to use the earmarked surplus to substitute the other on-budget expenditures in stead of increasing the social welfare expenditure directly. Since there are no empirical studies on the fungibility of the earmarked surplus of Taiwan lottery, the purpose of this study is to empirically analyze whether Taiwan local governments explore the behavior of robbing Peter to pay Paul. The data cover 23 counties/cities in Taiwan and the period of 1985-2004. We use a panel data model, which employed the 1985-2000 data before the year of issuing lottery, to forecast the 2002-2004 net local social welfare expenditure per capita. By the comparison of real and predicted local social welfare expenditures, the results show the fungible behavior for all the local governments except Taipei country in 2002-2004, and Taidong county and Hsinchu city in 2002. We further use another panel data model which employed the data of the period of 1985-2004 by introducing a dummy variable of before and after lottery issuing. The results also show the issuing of Taiwan lottery induces a significant fungible effect on the local social welfare expenditures.