In this article, the authors consider issues of fiscal decentralization in the context of sustainable development of territories, justify the development trends of the world community in providing public goods for the population. The analysis of this issues is carried out in comparison of indicators for Russia and the countries of the Organization for Economic Cooperation and Development (OECD). This allows assessing the current level of fiscal decentralization in the world community, in Russia, and also determining its prospects. The authors presented the results of the study, which contain the dynamics of subnational budgets of Russia and OECD countries, separately identified local budgets, the dynamics of financing of proactive budgeting, the typology of the main projects of proactive budgeting, examples of municipal-private partnership projects implemented in Russia. In addition, the article sets out new approaches to the financial support of local government activities in the country, based on the introduction of self-taxation, bond loans and other forms of financing at the municipal level.
Decentralized finance has evolved as a major contender for traditional banking systems over the last few years. Evolution in blockchain and cryptography technologies are the driving forces for decentralized finance’s growth. The emergence of Bitcoin in the finance system was a major driving force toward the tremendous growth of decentralized finance. However, with various platforms merging every day, the decentralized finance sector is still in its early, unorganized stages. The current decentralized finance market is chaotic. With a new “coin” being introduced almost every month, standardization is highly lacking in the system. DeFi already has several different applications available. For instance, one can purchase stable coins, or assets pegged to a national currency, on decentralized exchanges, move the assets to a lending platform that is also decentralized to earn interest, and then add the interest-earning instruments to a decentralized liquidity pool or an on-chain investment fund. DeFi enterprises frequently aim at decentralized decision-making, or governance, in everything from the user fees to the products they provide. A decentralized program may be started by one person or a small number of individuals, but as the project gathers traction, its leaders frequently try to step down and cede control to the user base. A decentralized autonomous organization that has its rules and regulations written into computer code and that may issue governance tokens, which allow its holders a voice in decisions rather than allowing the decision-making to a centralized government authority as in case of traditional finance, could represent this transition. While on one side, world governments are still trying to grasp and regulate the sector, on the other side, the technology’s reach has been very limited. Undoubtedly, the emergence of blockchain-based decentralized finance is massively influencing our current finance technology industry. In this chapter, we discuss the current growth in the FinTech industry and the blockchain-based decentralized finance sector. Furthermore, we discuss how decentralized finance can be used in the current FinTech industry.
The fiscal decentralization policy has made local governments have the authority to generate income and manage regional finance independently for public services and public welfare. This study aims to: 1) Analyze the degree of fiscal decentralization in Jambi Province; 2) Analyzing community welfare proxied from the human development index in Jambi Province; 3) Analyzing the impact of fiscal decentralization on the welfare of the community in Jambi Province. This study using panel data, a combination of time series data in 2010-2016 and cross section 11 districts/cities in Jambi Province. The method of data analysis is descriptive analysis and panel data regression analysis approach, namely the fixed effect model (FEM). Hypothesis testing uses the F test statistic and the statistical t test. The results showed that: 1) The degree of fiscal decentralization, namely the ratio of district own source revenue (PAD) to total regional income (TPD) in each district/city in Jambi Province was relatively relatively low, whereas for Jambi Province it was in good category; 2) Community welfare as illustrated by the human development index in each district/city including Jambi Province is still in the moderate category, except Jambi City (76.14) and Sungai Penuh City (73.35) are categorized as high; 3) Fiscal decentralization has a positive and significant impact on improving community welfare. it means that the better the implementation of fiscal decentralization, the higher the level of community welfare.
Without much preparation, Indonesia in 2000 the new system replaced the previous centralized governance system and development planning with various decentralization programs. The reforms gave greater authority, political power, and financial resources directly to districts and cities, through the provinces. Strengths transferred include those who carry out various responsibilities in the fields of health, primary and secondary education, public works, environment, communication, transportation, agriculture, manufacturing, and other economic sectors. At the same time, the government replaced the cash-based public finance system, a single-entry financial system with a modern double-entry accounting system that uses one treasury account; based on performance; and has transparent public cash management, strict expenditure and financial controls with performance indicators, computerized reporting, and a tightly scheduled audit system.
Olena Chygryn, Yuriy Petrushenko, Alina Vysochyna, Анна Воронцова
Testing the hypothesis of FD's positive influence on different parameters of social and economic development was realized on the base of panel data analysis for the set of European countries (Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Macedonia, Moldova, Montenegro, Romania, Serbia, Slovenia, Turkey and Ukraine). Methodologically it was realized through the using of panel data regression model (independent variablesmeasures of fiscal decentralization, dependent variablesmeasures of social or economic development) in Stata 12/SE. This research allowed to confirm the hypothesis on positive impact of different measures of fiscal decentralization on GDP, GDP growth rate, foreign direct investments, and social contributions. Nevertheless, negative impact of fiscal decentralization on GNI per capita and export of goods and services was found. Besides, increase of public finance centralization stimulates inflation. There was identified controversial impact of different parameters of fiscal decentralization on dynamic of import of goods and services, accordingly.
The local government administrations in Romania have become more visible for taxpayers lately, once the decentralization process has developed. The interest in knowing how local government resources are used has increased, especially after diversifying and increasing funding sources. The present paper presents a detailed analysis of the public revenues and expenditures for the territorial administrative units in Romania. A number of local public finance problems are highlighted: the decrease of public investment, the budget imbalances, the increase of transfers from the state budget, etc., which have been worsened by some legislative changes in recent years.
The purpose of the study is to investigate a financial component of interbudget relations in Ukraine in part of providing and improving the horizontal equalization of regional budgets under the conditions of decentralization. We aim to measure horizontal fiscal imbalance in Ukraine before and after implementation of the decentralization reform: the changes in the horizontal levelling of regional budgets in pre-reform period and during a period of budgetary decentralization. The methodology of the research is based on the theory of public finance, in particular on the theory of fiscal federalism. Study uses the estimation of the statistical data of the authorized bodies related to the distribution of the state budget funds over the regions of Ukraine. The time interval of the research is four years (2015-2018) due to the starting time of implementation of the decentralization reform in Ukraine and the availability of published statistical information. Software packages MS Excel 2016 and SSPSS Statistics 17.0, StatGraphics Plus 5.0 are used for economic-statistical calculations. Such analysis is conducted using the methods of synthesis, tabular, graphic, cluster and correlation analysis. The constrains of the study are related to the incomplete statistical data of the State Statistics Service of Ukraine, the State Treasury Service of Ukraine and the Ministry of Finance of Ukraine. Results. It is proved that the equalization subsidy was the main tool for equalizing of the revenue part of local budgets. It formed about a quarter of revenue of local budgets and about half of official transfers of local budgets. It is found out that horizontal imbalance is much lower after the decentralization reform in Ukraine: after reforming the horizontal equalization, the absolute volume of the horizontal equalization decreased by 11.5 times, relative indicators decreased by 15 times. A detailed analysis reveals the existence of imbalances in the horizontal equalization of regional budgets in Ukraine in 2015-2018. Furthermore, the present system of horizontal equalization is ineffective according to the criterion of fiscal efficiency and contradicts a basic approach of budget decentralization. Four budget clusters are identified based on the criterion of distribution of basic subsidy: 1-st cluster of budgets with average size of basic subsidy (budgets of Vinnytsia, Zhytomyr, Chernigiv, Kirovograd, Khmelnytsky, Mykolayiv and Cherkasy regions); 2-nd cluster of budgets with minimum amounts of basic subsidy (budgets of Luhansk and Sumy regions), and with the change of directions of horizontal equalizationts (budgets of Donetsk, Kharkiv, Odesa and Lviv regions); 3-rd cluster of budgets with maximum size of the basic subsidy (regional budgets of Volyn, Rivne, Kherson, Ivano-Frankivsk, Ternopil, Zakarpattia and Chernivtsi regions); 4-th cluster of budgets of those who transfered a reverse grant to the State Budget of Ukraine (budgets of Dnipropetrovsk, Zaporizhzhia, Kyiv and Poltava regions). Practical meaning. The directions of improvement of the horizontal equalization of regional budgets in Ukraine are substantiated, among them: introduction of the index of horizontal equalization; constance of approaches to horizontal equalization for three years according to requirements of medium-term budget planning and sustainable development of regions; extending the interval of the index of horizontal levelling. The prospects for further study are related to the justification of the mechanism of financial provision of local government in the context of implementation policy of decentralization.
У статті розглянуто особливості фінансової децентралізації в Україні. Досліджено повноваження отримані органами місцевого самоврядування для надання якісних та доступних суспільних послуг громадянам. Також, охарактеризовано відповідальність органів місцевого самоврядування перед виборцями – за ефективність своєї роботи, а перед державою – за її законність. Крім того, досліджено основні джерела ресурсів об’єднаних територіальних громад та проведено групування за критеріями їх сутності та ролі у формуванні конкурентних переваг. Проаналізовано фінансову спроможність громад. Визначено, інші інструменти забезпечення економічного розвитку громади, зокрема, здійснення зовнішніх запозичень, самостійне обрання установ з обслуговування коштів місцевих бюджетів відносно розвитку та власних надходжень бюджетних установ, сформовано теоретико-методологічні положення, які можуть бути покладені в основу сучасної системи управління ресурсоефективністю територіальних громад. Доведено, що добровільно об’єднані територіальні громади мають усі можливості й ресурси для повноцінного функціонування та розвитку. Сьогодні органи місцевої влади беруть на себе цілковиту відповідальність за всі сфери життя на власних територіях, що і є показником успішної й доцільної діяльності ОТГ. Визначено, що за умови добросовісного виконання зобов’язань, підвищується ефективність використання бюджетних коштів, а це – прямий і правильний шлях до стабілізації соціально-економічної ситуації в усій країні. Визначено проблеми з якими стикаються місцеві органи влади на шляху до децентралізації. Проведено аналіз видаткових повноважень органів місцевого самоврядування у сучасних реаліях.
Michael Alexeev, Nikolay Avxentyev, Arseny Mamedov, Sergey Sinelnikov-Murylev
Using a panel of Russian regions, we estimate the link between intraregional fiscal decentralization and regional budget deficits. Although Russia’s regions are not as autonomous (either politically or fiscally) as regions in some other federal states, we obtain robust and statistically and economically significant results. Specifically, expenditure decentralization has a positive effect on consolidated regional budget balances, while transfer dependence of municipalities is associated with higher deficits. The impact of revenue decentralization depends on whether a regional government can use its tax revenue assignments with the same high degree of discretion that generally characterizes explicit fiscal transfers. We show that a 2009 local finance reform that limited the discretion of regional governments to assign regional tax revenue to municipalities has changed the effect of tax decentralization on budget discipline.
Siti Aisah Bauw, Lillyani M. Orisu, Melkion D.T. Worabay
Government transfers are one of the central government's interventions in autonomous regions that aim to help regions with low fiscal capacity. With the development of transfers in Manokwari Regency which is always increasing, describing government spending in financing development still depends on the central government or balance funds. The purpose of this study was to etermine the effect of government transfers on the fiscal erformance of Manokwari Regency in the implementation of decentralization. This study is aimed at analyzing he influence of government transfers on the fiscal performance of the Manokwari District government in the implementation of decentralization. With five years of observation. Model estimation is analyzed using simple linear regression (simple linear regression) by partially testing the hypothesis. The results showed that the variable government transfer index had a positive coefficient (+) on the fiscal performance of the regional government, with a R2 value of 86% indicating a ignificant influence on the fiscal performance of the local government.
Paolo Chiades, Luciano Greco, Vanni Mengotto, Luigi Moretti · 5 authors
For the period 2003–2014, we investigate unexplored effects of fiscal consolidation in decentralized public finance on a large dataset of Italian municipalities. Based on a simple, realistic theoretical model, we show that municipalities increase arrears on committed investment expenditure as a response to intergovernmental transfer cuts. Then, we test our predictions controlling for potential sources of endogeneity, and find that a reduction in intergovernmental transfers causes a significant increase in arrears, in addition to other common adjustments to local fiscal policies (e.g., tax revenues). Our results highlight a perverse effect of fiscal consolidation packages implemented by centrally imposed fiscal restraints.
By 2022, a change in the form of government from unitary to federal will likely happen in the Philippines, a nation of 104 million. Although decentralization is not new to the country owing to the passage of the Local Government Code of 1991, the transition will have major policy implications on the assignment of expenditure and revenue (taxation) responsibilities for government functions. This study focuses on the technical and vocational education and training (TVET), an important component of the Philippine Government’s national strategy for economic development and poverty alleviation. TVET governance in the Philippines is placed under the authority of the Technical Education and Skills Development Authority (TESDA), an agency attached to the national government which operates a network of over a hundred TVET training schools and institutes. With the impending shift to a federal system, TESDA needs to formulate a decentralization strategy, determining which sub-functions of TVET governance should be retained at the national level, devolved/transferred to subnational governments, and shared between the two levels government. This paper maintains that in addressing these policy issues, the Philippine Government should be guided by the principles of fiscal federalism and informed by existing TVET vi decentralization models in federal countries worldwide. This paper utilizes comparative institutional analysis, an analytical framework that examines existing institutional arrangements in some jurisdictions to inform policy formulation elsewhere. TVET governance in eight federal countries are analyzed by answering this question: Which sub-functions are assigned to what level of government? The sub-functions of the TVET system are: a) policy formulation and planning, b) standard-setting and regulatory, c) financing/contracting and d) provision of TVET services to clients. Based on the findings of the study, policy makers in the Philippines are enjoined to consider the following policy recommendations on decentralizing TVET under the proposed federal system: a. TVET policy formulation, planning, standard-setting and regulatory functions should be assigned solely to the national government so that TVET governance is harmonized across jurisdictions, and to be consistent with the national government’s equity goals; b. Financing/contracting for TVET can initially be assigned as a “shared function” between the national and subnational governments; however, in the long term, the subnational governments should develop their local revenue generation capacity and eventually be responsible for TVET financing/ contracting in their jurisdictions. Policy makers should also explore alternative models for TVET financing such as inclusion of TVET in the existing Special Education Fund (SEF) and establishing a TVET Training Fund; vii c. Provision of TVET training services can initially be a “shared function” between the two levels of government; however, as experiences of federal countries clearly show, the primary responsibility of providing TVET services to clients should rest with the subnational governments.
Taisiia Bondaruk, О. S. Bondaruk, Oksana Vinnytska
Administrative reforms in Ukraine focused on decentralization of governance system, change in the administrative and territorial system by consolidating communities and redistribution of authorities and financing sources at local governance level are expected to be implemented in keeping with European standards. The need to achieve positive dynamics of the economic system in Ukraine raises the importance of studies covering the array of problems related with the operation of local budgets, including European practices of local budget formation in the conditions of decentralization and their applicability for Ukraine. The purpose of the article is to investigate foreign practices of budget decentralization and their implementation perspectives in Ukraine.
 The essence of budget decentralization is highlighted; main indicators measuring budget decentralization and financial autonomy of local self-governance bodies are shown. As three models of local self-governance financing are distinguished by main criteria of financial decentralization (Scandinavian, Latin, and Hannover), peculiarities of the local budget formation in three countries belonging to the above models are analyzed: Finland (Scandinavian model), Spain (Latin model), and Poland (Hannover model). Results of the study show that while in countries of Scandinavian and Latin model taxation of consumption and residents’ incomes prevails, with fiscal importance of taxation of real estate, in countries of Hannover model taxation of consumption has minor significance.
This article intention was to set up the big picture of all 1,639 cryptocurrencies up and give a policy recommendation for Thai government. Hence, there were three following objectives as follows: 1) to investigate the state of the art of all cryptocurencies in the source of Code / Forking due to limitation of number of pages 2) to identify the best practice of cryptocurrency, and 3) to study the role of General Prayuth Chan-o-cha’s government towards cryptocurrency. Documentary research and descriptive statistics like frequency and percentage were used in this study. The findings found that there were twelve groups of qualified cryptocurrencies in CoinMarketCap, led by two well-known giant family of crypto market, Ethereum (35.5%) and Bitcoin (16.1%). Then, the best practices were on the provision of coins or tokens, twelve techniques for managing blokchain (such as Blockchainas-a Service), blocktime was between 0.03 and 30 minutes with Mean = 1.96, S.D. = 2.29 whereas TPS was between 0 - 1,400,000 with Mean = 1341.87 and S.D. = 36021.52, most of cryptocurrencies had their own Web Site (95.8%) and E-mail (78.8%), coding played a big role in cryptocurrency such as C . Last, cryptocurrency had both open and hidden-and-dark faces. In the open face, tax, law, people’s identification will be useful. In contrary to the open side, setting an autonomous public organization is one and only one solution for all cryptocentric affairs.
This article analyses the impact of state decentralization on one aspect of territorial diversity, specifically on the policy discretion of regions, as an expression of their political autonomy for self-government. Our interest focuses on the factors that determine the decisions and actions of regional governments in developing their policies. We ask: why do regional governments take different public policy options? Conceding that several factors help explain policy decisions (such as productive structure, government ideology, social capital, political context, budgetary resources), we choose to explore the impact of two of them, by asking: in what way, and to what extent, are policy decisions and actions conditioned by the financing model and by their different ideologies? We present quantitative and qualitative comparative evidence from two contrasting case studies: two regions in decentralized Spain that have developed their own policies of income and spending, and have translated them into differing public management policies and regulatory models for providing health services. These governments are ideologically different and have undergone different degrees of recent ideological changes, but the resources provided to them by the financing model have also been different. We show how resources determine the scope of governments’ actions, while ideology determines their direction.
This thesis analyzes whether the fiscal relations between the central and local governments of Turkey can be solely explained by socio-economic and demographic factors or the regional and political positions of cities also affect it.We use a balanced panel dataset consisting of all of the 81 cities of Turkey over the years 2008-2012.Our main dependent variables are transfers and government compensation.We define government compensation as the total government spending made in a city excluding local own revenues.Other fiscal aggregates such as local own revenues and expenditures, or fiscal indicators such as fiscal decentralization and financial independence, defined as the share of local governments spending financed by its own revenues, are also analyzed.Regression analysis and robustness tests showed the following: (i) Socio-economic structure of cities are significantly associated with the amount of transfers and government compensation; which means that the transfer rule of Turkey, as an institutional mechanism, is quite successful addressing regional socio-economic differences.Besides, there is no robust effect of political parties on the amount of transfers and government compensation.(ii) Our analysis also shows that there is a significant association between political parties and local expenditures, revenues, and expenditure decentralization.
Purpose-The financial aspect of local government autonomy is considered a very important topic in the public finance literature especially for the developing countries. Fiscal autonomy empowers the local government units with the right means to provide better services for the community and to proper allocate the funds based on the citizens needs. The purpose of this paper is to study the level of financial autonomy in Albanian municipalities and compare the characteristics within different units of local government. Methodology-In this paper we analyze the financial autonomy of Albanian municipalities by proposing an index to compare the governmental units and classify them in four classes according to the degree of autonomy. Seven quantitative indicators are used in the index, with different importance coefficients. Findings-In Albania, while important progress has been made on advancing the decentralization reform in the last decade, autonomy of local government still remains a challenge. Local authorities do not have appropriate financial resources and they are depended on transfers from the central government budget.
This research aims to analyse the degree of fiscal dependence of local government upon the central government in the regency of Mimika, one of Indonesia’s eastern regencies. The ratio of fiscal decentralization is used to calculate the local government’s ability to increase its regional revenue in order to support development initiatives in all sectors (Malmudi, 2010). Secondary data of locally-generated revenue and total revenue from the period 2010-2015 are used to measure the degree of fiscal decentralization. The results show that the degree of fiscal decentralization in the regency remained at a low level, reflected from the average value of 12.92 percent with the highest degree, of 25.09 percent in 2012. An analysis of fiscal decentralization in the period 2010 – 2015, indicates that the regency lacked sufficient fiscal capacity, showing heavy dependence upon financing from the central government. The local government is expected to develop the region’s potentiality through creative efforts within their governmental apparatus to increase local revenues. The funds from the central government could provide a positive contribution if used in the consumption of goods and services that potentially support economic activities.
The study aims to determine the opinions of school principals on decentralization in education. Phenomenological research design was used in the study. The purposive sampling methods of convenience and criterion samplings were used together. The study group was composed of six volunteer principals. The data were collected through individual face-to-face interviews using a semi-structured form. Descriptive analysis and inductive content analysis were used. In conclusion, from a holistic perspective, most of the participants found the concept of decentralization to be close to full autonomy which is usually perceived as dangerous in terms of the unitary state structure. Therefore, they have more centralized attitudes towards educational processes other than financing and infrastructure support regarding decentralization in education. This is indeed an indication that concerns regarding decentralization in education are high. The participants think that decentralization will not harm our national identity and the national education structure is beneficial.
Since its independence the Republic of Croatia has commenced a thorough reconstruction of its taxation system according to the market economy taxation policy. Essential taxation reforms have brought the system closer to EU systems i.e. it has been being harmonized with taxation systems of developed European countries. The Republic of Croatia has adopted solutions that are used by the majority of European countries. Current tax system of the Republic of Croatia can be viewed through three fiscal levels, but this paper deals with decentralization and revenue, especially tax revenue of local and regional self-government units. The paper will present importance and a way of collecting revenue, especially tax revenue and satisfying public needs in terms of counties, cities and municipalities. The local and central characteristics of the certain types of taxes and the specialities thereof, as well as the applied functional differences are also scrutinized, and a widely accepted opinion of the taxpayers is explained. Taking these into account, the scientific contribution of this paper is that it provides a basis for further research on tax system development.