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Basic Income—an early Icelandic experiment

Abstract

Old age, illness, and/or physical and/or mental disabilities may limit the ability of an individual to generate enough income to cover basic costs of living. Most developed nations provide financial assistance to persons with limited abilities. In 1974, an Icelandic government passed an act of law providing a tax credit, payable to taxpayers under certain conditions. The tax allowance was applied first to settle the taxes and public levies owed by the taxpayer, with any amount remaining paid out to the individual. This system can be seen as a first, limited attempt at establishing a partial universal basic income of sorts. This social interaction between stakeholders on how to share the tax revenue between the taxpayers led to a government crisis. The shareholders in this partial universal basic income system, the state and municipalities, the old age community, the trade unions, and the employers all have different financial and political interests and were affected by this reform. The lesson is that a basic income would need strong supporters if implemented, where the role of the government and/or the parliament would be mapped. Its supporters must be able to withstand the pressure from the social partners in the labor market because of the interactivity of the social security system and the pension fund system, which is not a part of the fiscal system in Iceland. The conflict of interests becomes apparent.

Open access
The Decisive Moment(s or periods) in the Application of Income Tax Rules and the Importance of Events Thereafter – a Swedish, Norwegian and Finnish Perspective and Comparison

Abstract

For a correct application of tax laws, it is central to know at what time or period the conditions of each case are to be tested against the respective tax rule. For example, in many questions, the conditions at the time of the transaction are decisive, but not seldom the tax rules take aim at the conditions at the end of the year – or some other time or period. It is also important to know what significance should be given to events after this time or period, not least when the income declaration is made and assessed. Here, these partly overlooked questions are presented and analyzed from the Swedish, Norwegian and Finnish income tax-perspectives.

Open access
Identifying Key Fraud Indicators in the Automobile Insurance Industry Using SQL Server Analysis Services

Abstract

Customer segmentation represents a true challenge in the automobile insurance industry, as datasets are large, multidimensional, unbalanced and it also requires a unique price determination based on the risk profile of the customer. Furthermore, the price determination of an insurance policy or the validity of the compensation claim, in most cases must be an instant decision. Therefore, the purpose of this research is to identify an easily usable data mining tool that is capable to identify key automobile insurance fraud indicators, facilitating the segmentation. In addition, the methods used by the tool, should be based primarily on numerical and categorical variables, as there is no well-functioning text mining tool for Central Eastern European languages. Hence, we decided on the SQL Server Analysis Services (SSAS) tool and to compare the performance of the decision tree, neural network and Naïve Bayes methods. The results suggest that decision tree and neural network are more suitable than Naïve Bayes, however the best conclusion can be drawn if we use the decision tree and neural network together.

Open access
The Importance of Supplier Evaluation in Short Supply Chains

Abstract

The consideration of supply chains can foster the viability and maintainability of local producers. The formation and retention of the market may be complicated for local producers; therefore it is advisable to take the creation of supply chains into consideration. Constant feedback and evaluation is highly important to maintain successfully operating short supply chains and supplier evaluation forms could act as the starting point of these chains. These forms reflect the strengths and weaknesses of suppliers, based on which the correction of mistakes can be done and the performance of suppliers may be enhanced. The aim of this study is to examine the role of supplier evaluation form and relationships between customers and suppliers in short supply chains, from a local producer’s point of view through a case study. The scientific relevance of this study is to draw particular attention to short supply chains which are and will be of high importance considering local economies. As the case study reveals, it is recommended for the members of short supply chains to use supplier evaluation forms.

Open access
Industrial Sector Growth, Macroeconomic Performance, and Corruption in the Sub Sahara Africa

Abstract

The study investigates the impacts of macroeconomic performance and corruption on the industrial growth of the SSA. The industrial sector is seen as the engine of the economic development of any country and hence policies that will promote the growth of the sector cannot be over emphasized. The study investigated effects of macroeconomic variables such as exchange rate, economic growth, inflation rate and unemployment rate as measures of economic performance in the SSA on the industrial sector growth. Also quality of institutions effects on industrial sector is investigated using control of corruption as proxy. The preliminary diagnostic results show that Panel Auto-Regressive Distributed Lags P-ARDL is appropriate for the estimation and the results show that both macroeconomic performance and corruption have significant impacts of the industrial sector growth in SSA. However, an exchange rate that will encourage domestic production, minimum inflation, and unemployment rates, will guarantee sustainable growth in the industrial sector, while tightening grip on control of corruption.

Open access
The Inflation-Growth Relationship in SSA Inflation-Targeting Countries

Abstract

This paper investigates the relationship between inflation and economic growth for South Africa and Ghana using quarterly empirical data collected from 2001 to 2016 applied to the quantile regression method. For our full sample estimates we find that inflation is positively related with growth in Ghana at high inflation levels whilst inflation in South Africa exerts its least adverse effects at high inflation levels. However, when particularly focusing on the post-crisis period, we find inflation exerts negative effects at all levels of inflation for both countries with inflation having its least adverse effects at high levels for Ghana and at moderate levels for South Arica. Based on these findings bear important implications for inflation targeting frameworks adopted by Central Banks in both countries.

Open access
Institutional Efficiency, Entrepreneurship, and the Premises of Economic Development in the Eastern European Countries

Abstract

The development gap between the “Old” and “New” member countries of the European Union is an important problem challenging the efficiency and strength of the European single market. In this regard, a subsequent question arises: which actions in the policy making must be undertaken, by both national and supranational authorities, to stimulate cohesion in the EU and which directions should be followed? The present paper tries to answer this question considering the perspective of the Eastern European nations and their economic development premises analysing the aspects of governmental participation in the economy and the influence of entrepreneurship upon long run competitiveness. The research results explicitly underline that entrepreneurship in the Eastern European nations is a determinative driver of long-term economic competitiveness due to its favourable impact upon the formation of human capital, enhancement of innovation potential and overall intellectual resources of nations. The effects of governmental participation in the economy upon the economic growth premises are heterogeneous including on the formation of physical and intellectual capital. Consequently, it was reached the conclusion that the Eastern European Nations should prioritise entrepreneurship since it is capable of boosting human capital creation and, at the same time, they should improve the institutional quality to minimise the factors undermining the business including corruption and red-tape, etc. In such a way, the Eastern European countries can overcome, in the long run, the development gap with the Western EU states and raise their economic potential.

Open access
What Do Managers Think About the Success Potential of CRM Campaigns?

Abstract

This research analyzes cause-related marketing (CrM) from the perspective of companies. The study aims to achieve a better understanding about what managers think about CrM by analyzing the level of acceptance and usage of this marketing tool, based on the UTAUT model. Using in-depth interviews as research method, we conclude that managers see the benefit of company partaken in initiatives as such, but not necessarily CrM. The reasons why managers choose to participate in Cause-related Marketing initiatives originate from the mix obtained through improving the firm by doing something considered socially positive. CrM was well evaluated by the participants and considered well positioned in terms of acceptance and usage, based on four factors: performance and effort expectancy, social influence, and facilitating conditions. Interviewees expressed excitement towards CrM and believe in it as a powerful tool to improve the firms’ image and consumers feeling towards it. While the literature uses several concepts (Corporate Social Responsibility or Social Marketing), the interviewees emphasize genuine caring and showing interest, time and funds to support consumers social concerns.

Open access
Acceptable levels of tax risk as a metric of corporate tax responsibility: theory, and a survey of practice

Abstract

Prescribed levels of acceptable tax risk are increasingly used to articulate degrees of corporate tax responsibility, but the theoretical basis for doing so is not well established. This article (i) develops a theory of the relationship between tax risk and tax responsibility and (ii) shows that acceptable levels of tax risk could be used as a meaningful metric for these purposes, provided that the filing positions a n ticipated from proposed planning are reviewed against the prescribed level of acceptable risk without taking into account any mitigation of the risk factors that are introduced by the planning. Further, the article reviews the evolving tax risk policies of 20 large European companies, showing that while some progress is being made towards meaningful discourse, even the companies with the most well-developed policies are still making their claims in such a way as to conflate socially responsible tax behavior with diligence in implementing antisocial tax behavior.

Open access