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Industry 4.0 and Transformation in Public Finance: An Assessment by Government Expenditures

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  • Miraç Fatih İLGÜN

Abstract

The fourth industrial revolution (Industry 4.0) offers a great potential for the transformation of economies and societies. Governments are responsible not only for keeping pace with Industry 4.0 and its underlying technologies, but also for managing this transformation. The aim of this study is to evaluate the possible effects of this phenomenon on public finance in terms of decision making process in public policy and amount and composition of government expenditures. In the light of the assessments based on early stages of the industrial revolution and the distinctive features of the new era, it has been concluded that the phenomenon of Industry 4.0 will have a decreasing effect on the ratio of current expenditures in total government expenditures, an increase effect in the share of social and economic transfer expenditures, and the potential to change the composition of investment expenditures according to economic classification of government expenditures.

Suggested Citation

  • Miraç Fatih İLGÜN, 2020. "Industry 4.0 and Transformation in Public Finance: An Assessment by Government Expenditures," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(44).
    • Handle: RePEc:sos:sosjrn:200211
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    More about this item

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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