Fiscal decentralization has become a crucial policy framework for strengthening regional governance and improving the capacity of local governments to finance development independently. However, many regions, including provinces in Indonesia, continue to experience high dependence on central government transfers due to differences in revenue-generating capacity and fiscal management effectiveness. This study aims to examine the effect of tax effort on regional fiscal independence and investigate the mediating role of fiscal space in the relationship between tax effort and fiscal independence in Indonesian provinces. A quantitative approach was employed using balanced panel data from 34 Indonesian provinces during the period 2019–2024. Secondary data were obtained from the Directorate General of Fiscal Balance of the Ministry of Finance and Statistics Indonesia. The data were analyzed using panel data regression with the Fixed Effects Model (FEM), while the mediation effect was tested using the Sobel test. The results indicate that tax effort has a positive and significant effect on regional fiscal independence and fiscal space. Fiscal space also positively influences fiscal independence when examined independently. Furthermore, the mediation analysis confirms that fiscal space significantly mediates the relationship between tax effort and regional fiscal independence. These findings indicate that strengthening local taxation capacity alone is insufficient; effective fiscal management is required to transform additional revenue into greater fiscal flexibility. This study concludes that sustainable regional fiscal independence requires an integrated strategy combining optimal tax mobilization and efficient utilization of fiscal resources. The findings contribute to fiscal decentralization literature and provide practical implications for policymakers in designing strategies to enhance regional fiscal autonomy.
Local government institutions (LGIs) are widely recognized as the cornerstone of democratic governance and sustainable local development. In Bangladesh, Union Parishads, Municipalities (Pourashavas), Upazila Parishads, Zila Parishads, and City Corporations play a vital role in delivering public services, promoting participatory governance, and fostering socio-economic development. Despite significant progress in decentralization, the financial autonomy of local governments remains limited due to excessive dependence on central government transfers and grants. The inadequate mobilization of own-source revenue (OSR) restricts the capacity of LGIs to finance infrastructure, maintain essential public services, and respond effectively to local development needs. This conceptual paper examines the relationship between strengthening local government institutions and improving own-source revenue mobilization in Bangladesh. Drawing upon theories of fiscal decentralization, public financial management, and good governance, the paper argues that sustainable local development requires financially autonomous local governments capable of generating, managing, and utilizing local revenues efficiently and transparently. The study identifies key institutional, legal, administrative, technological, and political constraints affecting local revenue collection while proposing policy options to enhance fiscal capacity. The paper further emphasizes that digital transformation, improved tax administration, citizen participation, institutional accountability, and fiscal transparency can significantly strengthen local revenue systems. Effective utilization of locally generated revenue not only improves service delivery but also reinforces public trust and democratic accountability. The findings contribute to the growing literature on decentralization and local public finance by providing a conceptual framework for strengthening local government finance in Bangladesh.
Niko Silitonga, Harya Widiputra, Fangky Antoneus Sorongan
Fiscal decentralization has been widely implemented to improve regional fiscal efficiency and strengthen local fiscal capacity. However, empirical evidence regarding its effectiveness remains inconclusive, particularly in developing countries with diverse institutional capacities. This study examines the associations between regional fiscal policy instruments and provincial fiscal performance in Indonesia, proxied by the growth of Locally Generated Revenue (PAD), while investigating the moderating role of fiscal decentralization. Unlike previous studies that examine fiscal instruments separately or focus mainly on macroeconomic outcomes, this research develops an integrated framework that evaluates financing allocation, development expenditure, transfer funds, and other legitimate revenues within a moderated panel-data model. Using panel data from 33 provincial governments during 2017–2024, the study applies a fixed-effects regression model with interaction terms. The results show that development expenditure is positively and significantly associated with provincial fiscal performance, indicating that productive public spending strengthens regional fiscal capacity. In contrast, financing allocation and transfer funds show no significant direct associations with fiscal performance. Other legitimate revenues demonstrate a positive but limited association. Fiscal decentralization plays a dual moderating role by strengthening the association between transfer funds and fiscal performance while weakening the effects of development expenditure and other legitimate revenues. These findings suggest that the effectiveness of fiscal decentralization depends on fiscal instruments and local institutional capacity rather than producing uniform outcomes. This study contributes to the fiscal decentralization literature by providing an interaction-based empirical framework and practical evidence to support more effective decentralization policies and improve provincial fiscal performance in Indonesia.
Although local public finance regulation has received substantial attention within fiscal decentralization and public financial management research, comparative analyses of its institutional configuration as an integrated regulatory regime remain limited. This study aims to examine the institutional design of local public finance regulation across European countries, analyze how regulatory standards, supervisory institutions, monitoring mechanisms, and enforcement instruments interact to strengthen regional governance, and formulate policy implications for Indonesia’s fiscal decentralization reforms. A qualitative comparative government design was employed through a systematic literature review. The study analyzed documentary evidence from 21 European countries purposively selected from Local Public Finance: An International Comparative Regulatory Perspective (2021), supplemented by Eurostat Government Finance Statistics, the European Commission Fiscal Rules Database, and the OECD Tax Autonomy Database. Data were examined using qualitative content analysis involving coding, categorization, cross-country comparison, and thematic interpretation. The findings indicate that effective local public finance regulation depends not merely on the presence of numerical fiscal rules but on the institutional integration of regulatory standards, supervisory bodies, monitoring mechanisms, and enforcement arrangements within coherent governance systems. Regulatory configurations also vary according to constitutional structures, administrative traditions, and fiscal decentralization models, resulting in diverse approaches to maintaining fiscal sustainability and regional accountability. The study concludes that effective regional financial governance requires balanced institutional arrangements that combine local fiscal autonomy with robust oversight, transparency, accountability, and regulatory coordination. These findings contribute to the literature on regulatory governance, comparative government, and fiscal federalism by conceptualizing local public finance regulation as an integrated governance regime rather than a collection of isolated fiscal controls. They also provide practical implications for Indonesia by emphasizing the need to strengthen supervisory capacity, fiscal transparency, enforcement consistency, and intergovernmental regulatory coordination in local financial governance.
Open access
Local Government Finance and Decentralization
Fiscal Policies and Political Economy
Sustainability, Governance, and Employment Studies
Fahd Ghalib Basheikh, Ida Widianingsih, Ahmad Zaini Miftah
Decentralized government units in the Global South frequently experience ineffective service delivery because of inadequate funding and weak administrative structures. Using Lamu County Government that allocates bursary funds yet continues to experience operational inefficiencies, this study examines how administrative capacity influences the governance effectiveness of the Lamu County Bursary Programme (LCBP). Guided by Administrative Capacity Theory, the study uses an explanatory sequential mixed methods design using quantitative data from 350 beneficiaries and qualitative data from key informant interviews and focus group discussions. Linear regression results show that administrative capacity is a statistically significant predictor of governance effectiveness (β = 0.627, p < 0.001). Thematic analysis from qualitative data shows three constraints: verification problems, aggravated by geographic dispersion and staffing problems; procedural uncertainty and communication problems, that erode the trust of applicants; and a structural timing penalty, where administrative delays reduce the timeliness and reliability of bursary support, sometimes resulting in temporary school exclusion. The results indicate that the LCBP experiences a capability trap, formal structures are in place but service delivery is weak. Therefore, decentralized units require both financial allocations and effective administrative capabilities. To improve policy outcomes, findings suggest the importance of digitization, staffing at ward level and synchronization of the disbursement calendar with academic cycles.
Aleksandar Stojkov, A. Maksimovska Stojkova, Elena Neshovska Kjoseva, Jovan Zafiroski
This study investigates how a territorially uneven distribution of informal economic activity affects subnational fiscal capacity and potentially distorts fiscal equalization systems. Using a Multiple Indicators, Multiple Causes (MIMIC) model, we estimate the size of the informal economy across the eight statistical regions of North Macedonia over the 2008–2023 period. The estimated shares of regional informality are subsequently linked to indicators of fiscal dependence and local revenue performance. The findings suggest that regions characterized by larger informal economies tend to exhibit greater dependence on intergovernmental transfers and weaker effective fiscal autonomy. The analysis further indicates that intergovernmental transfer systems relying primarily on regional gross domestic product and realized tax collections may systematically underestimate the true economic potential of highly informal jurisdictions. The paper contributes to the literature by conceptualizing informality not merely as an informal economic activity, but as a structural distortion affecting the measurement of fiscal capacity and the functioning of decentralized public finance systems.
Decentralization is a popular idea that is believed to bring improved public service and sustainable growth that is both inclusive and natural. On the other hand, in the case of developing states, the degree to which it works depends mainly on the local political situation and the existing social order. One of the most notable achievements in the Nigerian judicial system has been a historic Supreme Court judgment in 2024 that gave local governments direct financial allocations. Each of the 774 Local Government Areas in Nigeria must now be directly financed to make local governance more effective by limiting state intervention. Nevertheless, this initiative is carried out in a very politicized setting that is at the verge of breaking apart due to the increase of ethnicity after the 2023 elections, and a citizenship policy that perpetuates a two, class system of indigenes and settlers. This paper illustrates how local financial independence, along with the indigene, settler systems, have an effect on the patterns of resource distribution and the provision of public goods and services. Through a mixture of a research paper on the local financial autonomy of LGAs in the South, West and North, Central zones of Nigeria and a theoretical framework based on Peter Ekeh's works "Two Publics" and a ground reality review, it is established that some of the scenarios created by financial autonomy exacerbated local elite capture and exclusion of so, called "long, term residents" who are defined categorically as "non, indigenes." This is evidenced by the findings on disproportionate capital expenditure distribution within wards, and qualitative viewpoints on local narratives about the justification for exclusion and rightful local belonging. The debate will continue on the proposition that if the idea of citizenship is not changed from one based on birth to one based on residency, it will result in local exclusion and development failure. The solution ends with a conclusion on residency, based citizenship and conditionality in the transfer of funds between different levels of governance
Setyo Tri Wahyudi, Al Muizzuddin Fazaalloh, Kartika Sari, Amalia Rahmawati
Fiscal decentralization has expanded the responsibilities of local governments, yet substantial disparities in fiscal performance persist across jurisdictions. This study examines how governance capacity influences fiscal performance and revenue sustainability within Indonesia’s decentralized metropolitan governance framework. Using panel data from seven local governments in the Gerbangkertosusilo metropolitan area during 2015–2024, the analysis develops a Composite Fiscal Performance Index (CFPI) that integrates revenue effectiveness, expenditure efficiency, fiscal autonomy, and revenue sustainability. The results reveal significant and persistent variation in fiscal outcomes. Jurisdictions with stronger governance capacity, particularly Surabaya City and Sidoarjo Regency, consistently achieve higher CFPI scores, reflecting more effective revenue mobilization, greater fiscal autonomy, and stronger expenditure management. In contrast, lower-capacity jurisdictions exhibit weaker fiscal performance, slower growth in own-source revenues, and greater dependence on intergovernmental transfers. Revenue forecasting further indicates that high-performing jurisdictions are more likely to sustain favorable fiscal trajectories over the medium term. By combining multidimensional fiscal performance measurement with forward-looking revenue sustainability assessment, this study contributes to the subnational public finance literature. The findings identify governance capacity as a critical institutional determinant of fiscal resilience and highlight the need for capacity-sensitive policies to improve the effectiveness of decentralized governance systems.
Abstract Fiscal decentralization has become a central component of Indonesia’s governance reform, with the decentralization of the Rural and Urban Land and Building Tax (PBB-P2) intended to strengthen local fiscal independence and improve public service delivery. Despite these objectives, significant challenges remain regarding local tax autonomy, fiscal equity, and the effectiveness of property tax administration. This study examines the adequacy of Indonesia’s current property tax regulatory framework within the fiscal decentralization regime and proposes a reconstructed legal framework capable of strengthening both fiscal equity and local tax autonomy. Employing normative legal research, the study utilizes statute, conceptual, comparative, and historical approaches to analyze constitutional provisions, legislation, and legal principles governing fiscal decentralization and property taxation. The findings reveal that the existing framework only partially fulfills the objectives of fiscal decentralization because local governments continue to exercise administrative responsibilities without corresponding regulatory discretion. Furthermore, disparities in regional fiscal capacity, inconsistencies in property valuation, and weaknesses in tax administration undermine both equitable taxation and effective local revenue mobilization. These shortcomings demonstrate that the current legal framework has not successfully balanced fiscal authority with fiscal responsibility nor adequately accommodated regional differences in revenue-generating capacity. In response, the study proposes a reconstructed property tax framework based on the principles of fiscal federalism, local autonomy, fiscal equity, subsidiarity, and good governance. The proposed model incorporates expanded local discretion in property tax administration, equity-oriented mechanisms to address regional disparities, and the modernization of tax governance through digital cadastral systems and GIS-based valuation technologies. The study contributes to the literature by developing an integrated normative framework that reconciles local fiscal autonomy with fiscal equity and offers a legal model for strengthening decentralized taxation and sustainable local finance in Indonesia.
Marzanna Poniatowicz, Paweł Konopka, Agnieszka Piekutowska
The paper refers to the twelve principles of fiscal decentralization, proposed by Roy Bahl (Bahl’s Rules for Fiscal Decentralization – BRfd), with special emphasis on the first Bahl’s rule (regarding the comprehensiveness of the fiscal decentralization, CSfd). The purpose of the research was to estimate the level of CSfd in OECD countries. Thus, the objective was to construct a synthetic measure of the first Bahl’s rule (CSfd) which constitutes the value added of this research. The goal was also to rank countries as the main idea was to advance empirical assessment in the field of fiscal federalism and to provide practical guidance for shaping public finance policy including policies on the collection of public revenues and the allocation of public expenditure. This directly corresponds to the research problem of the very limited number of tools available for measuring fiscal decentralization. Based on Hellwig’s method of linear ordering two rankings were developed using the Euclidean metric and the Mahalanobis metric. The results indicate that the most comprehensive fiscal decentralisation systems in 2022 were found in the Slovak Republic, Switzerland and Canada (ranking based on the Mahalanobis metric). When the Euclidean metric is used, Switzerland emerges as the leader, followed by Spain and Austria. First published online 4 June 2026
Andi Aidir Arsy, Dewi Salmita, Muhammad Syafaat, Noval · 5 authors
Purpose - This study examines the association between regional investment, leverage, and regional financial independence within the fiscal decentralization framework. Design/methodology/approach - A quantitative associative approach is employed using pooled panel data from 13 regency and municipal governments in Central Sulawesi Province during 2018–2024. The relationships among variables are analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM) with WarpPLS. The analysis is grounded in fiscal decentralization theory and agency theory to explain local government financial management behavior. Finding/Results – The results indicate that regional investment and leverage are positively and significantly associated with regional financial independence in the pooled PLS-SEM model. Long-term investment is related to stronger fiscal capacity, while leverage may serve as a supportive financing instrument when managed prudently. Together, both variables explain a moderate proportion of the variation in regional financial independence. Originality/Value - This study contributes empirical evidence on how regional investment and leverage are linked to local fiscal autonomy in Central Sulawesi, an underrepresented provincial context in Indonesian local government finance studies. The findings provide practical insights for local governments to improve productive long-term investment and maintain prudent liability management. This study is limited to one province and two explanatory variables; therefore, future research may expand regional coverage and include governance quality, revenue effectiveness, transfer dependence, and expenditure efficiency.
This article explores the theoretical discourse on managing public finances (PF) of territorial communities (TCs) in Ukraine under conditions of politico-economic uncertainty and ongoing conflict. It examines the role of PF in addressing societal needs, ensuring economic viability, and promoting financial autonomy within the decentralization framework. Public finances are defined as a system of economic relations encompassing the formation, distribution, and utilization of centralized and decentralized funds to fulfill public interests, aligning with legislative priorities. The study analyzes PF components, including local budgets, communal enterprise revenues, credit resources, and targeted funds, emphasizing transparency in line with IMF fiscal transparency recommendations. The reinstatement of medium-term budget planning through the Budget Declaration for 2025–2027 enhances financial discipline and policy predictability, despite challenges posed by prolonged conflict and defense spending. It is argued that continuing reforms in the financial sector should facilitate the creation of a foundation for sustainable growth in the future, while reforms in public finance, particularly in optimizing expenditures in education and healthcare, will help effectively manage increasing defense-industrial costs, boost tax revenues, and strengthen fiscal discipline and economic efficiency. The banking sector's stability, supported by robust capital and liquidity, fosters economic growth by facilitating credit access for TCs. Suggested strategies for improving PF management, such as income diversification, fiscal consolidation, and strategic planning to mitigate systemic risks. Harmonization with EU financial regulations strengthens competitiveness and attracts foreign investment. The research highlights the importance of public-private partnerships and alternative financing sources like grants and loans to ensure TC resilience. Future studies should focus on overcoming challenges such as limited tax bases, dependency on transfers, and adapting financial strategies to wartime constraints, contributing to sustainable socio-economic development of TCs.
The article examines the distribution and use of budgetary resources across different levels of governments in post-socialist countries of Central and Eastern Europe and Ukraine. The relevance of the study derives from the need to assess fiscal decentralization models in the context of institutional transformation and current challenges, including those related to wartime conditions. The analysis focuses on the relationship between the institutional structure of subnational governance, the degree of fragmentation of local communities, and the patterns of budgetary resource allocation. Particular attention is given to the comparative assessment of revenue and expenditure structures, with an emphasis on ensuring cross-country comparability by excluding social security funds from the general government sector. The results indicate that most post-socialist countries have a centralized pattern of revenue formation combined with a relatively decentralized execution of public expenditures. This configuration gives rise to an asymmetry between the sources of financial resources and the responsibilities for their use. It is argued that this asymmetry represents a structural feature of intergovernmental relations and constrains the financial autonomy of local governments. The analysis also shows that more fragmented municipal systems are associated with higher levels of revenue centralization and stronger dependence on intergovernmental transfers, whereas larger territorial communities tend to provide a more stable basis for local fiscal capacity. In the case of Ukraine, a dual trend is observed. On the one hand, decentralization reforms have strengthened the financial capacity of local communities; on the other hand, wartime conditions have led to a temporary re-centralization of financial resources and an expanded role of the central government in financing priority expenditures. The findings may be used to improve the allocation of budgetary resources and to achieve a better alignment between revenue assignment and expenditure responsibilities, particularly in the context of post-war recovery.
This article examines how Switzerland’s decentralized welfare structure shapes the outcomes of Basic Income reforms. Using SWISSMOD, a static microsimulation model based on EUROMOD, we simulate unconditional transfer schemes of varying generosity at federal and cantonal levels, combined with alternative financing. Our results show that Basic Income reduces poverty and inequality across all scenarios, but effects differ by implementation level: federal schemes achieve stronger redistribution and uniformity, while cantonal schemes produce heterogeneous outcomes and maintain interregional disparities. Progressive taxation enhances equity but risks excessively high marginal rates; wealth taxation offers fiscal relief but does not automatically enhance poverty reduction or social protection in a decentralized setting. Thus, centralized implementation enhances uniformity and equity across regions, while decentralized administration preserves local differentiation but risks perpetuating spatial inequalities. These findings underscore the importance of aligning social policy design with fiscal federalism when considering unconditional transfers and equitable access to income security.
This study aims to analyze and synthesize prior research on navigating human resource capacity and accountability challenges in decentralized public finance through a Systematic Literature Review (SLR). The review focuses on how human resource capacity, fiscal autonomy, digital governance, and accountability mechanisms interact in shaping the effectiveness of decentralized public financial management. The SLR method was employed because it allows a structured and transparent synthesis of previous findings, identifies recurring patterns, and clarifies inconsistencies across studies. Literature was searched through the Directory of Open Access Journals (DOAJ), covering publications from 2022 to 2026, using combinations of keywords related to fiscal decentralization, human resource capacity, accountability, transparency, local government finance, and public financial management. The initial search identified 63 records, which were then screened based on title relevance, abstract suitability, research focus, publication year, full-text availability, and substantive alignment with the topic. After the selection process, 11 articles were retained for final review and analyzed through descriptive-qualitative synthesis. The findings indicate that decentralized public finance becomes more effective when supported by competent human resources, merit-based administration, strong internal control, adequate digital systems, and meaningful citizen participation. In contrast, weak technical capacity, fiscal dependence, fragmented institutions, and limited managerial autonomy repeatedly hinder accountability outcomes. This review contributes to the literature by reinforcing the capacity–accountability linkage as a central explanatory framework and by offering practical insight for policymakers and public administrators seeking to strengthen local fiscal governance in decentralized settings.
Pakistan's most significant federalist initiative, the 18th Constitutional Amendment (2010), scrapped the Concurrent Legislative List and transferred wide-ranging legislative, administrative, and fiscal responsibilities to the provinces. But more than ten years on, devolution remains uneven. In this paper, we explore the administrative, political and institutional obstacles to devolution between 2010 and 2018, with a focus on Centre-Punjab relations, the pivot of Pakistan's federation. Through a qualitative documentary analysis of parliamentary proceedings, archival documents, institutional reports and academic work, we argue that bureaucratic mediation operates as a two-pronged process: provincial bureaucracies, especially in Punjab, facilitate some devolved functions, while federal bureaucracies continue to exert control via regulatory coordination, conditional fiscal transfers and legal grey areas. The National Finance Commission (NFC) Award, which increased provincial transfers, has not ended fiscal dependence: the provinces receive 60-70% of their budget from the centre. The removal of the Concurrent Legislative List resulted in unequal sectoral outcomes - provincialization in health and education, but contested labour and interprovincial coordination. We suggest that constitutional devolution in the absence of simultaneous bureaucratic, fiscal autonomy and effective intergovernmental coordination creates a hybrid governance form: constitutionally decentralized and operationally centralised. In the case of Punjab, we find that bureaucratic capacity is not enough; path dependence, bureaucratic opposition and political bargaining over devolution shape the outcomes. Our insights enrich understanding of decentralization theory by identifying bureaucratic mediation as a critical variable and provide policy lessons for other federations in the midst of reforms. References Adeney, K. 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Rethinking decentralization in developing countries. World Bank. Mustafa, Z. (2019). The 18th Amendment and Pakistan's federal evolution. The Lahore Journal of Economics, 24(2), 1–28. Naseer, A., & Khalid, I. (2021). Bureaucratic mediation in Pakistan's devolution. Asian Journal of Political Science, 29(3), 301–320. https://doi.org/10.1080/02185377.2021.1967304 National Assembly of Pakistan. (2014). Parliamentary debates on devolution implementation. Government of Pakistan. National Finance Commission. (2009). 7th National Finance Commission Award 2009. Ministry of Finance, Government of Pakistan. Niskanen, W. A. (1971). Bureaucracy and representative government. Aldine-Atherton. North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press. Oates, W. E. (1999). An essay on fiscal federalism. Journal of Economic Literature, 37(3), 1120–1149. https://doi.org/10.1257/jel.37.3.1120 Organisation for Economic Co-operation and Development. 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Aziz (Ed.), Pakistan’s constitutional journey (pp. 145–176). Oxford University Press. Stepan, A. (1999). Federalism and democracy: Beyond the U.S. model. Journal of Democracy, 10(4), 19–34. https://doi.org/10.1353/jod.1999.0072 Supreme Court of Pakistan. (2015). Government of Punjab v. Federation of Pakistan (Civil Appeal No. 12 of 2015). Talbot, I. (2015). Pakistan: A modern history. Oxford University Press. Thelen, K. (2004). How institutions evolve: The political economy of skills in Germany, Britain, the United States, and Japan. Cambridge University Press. Treisman, D. (2007). The architecture of government: Rethinking political decentralization. Cambridge University Press. United Nations Development Programme. (2013). Federalism in Pakistan: Opportunities and challenges. UNDP Pakistan. United Nations Development Programme. (2023). Devolution in Pakistan: Status, challenges and way forward. UNDP Pakistan. Waseem, M. (2019). Centre–province relations in Pakistan. In L. R. 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Open access
South Asian Studies and Conflicts
Politics and Conflicts in Afghanistan, Pakistan, and Middle East
Vabuk Pahari, B. Chandrasekaran, Johnnatan Messias, Krishna P. Gummadi · 5 authors
A decentralized autonomous organization (DAO) is a governing entity that empowers its stakeholders (i.e., users who hold one or more of its tokens) to manage blockchain-based protocols (i.e., smart contracts) collaboratively. The governance of a DAO is explicitly encoded in the DAO's governance contract, which defines how stakeholders participate in governance and how much influence (or voting power) they have in any decision. While decentralization and autonomy are the fundamental tenets of a DAO's design, empirical evidence suggests that in practice governance is often highly centralized. In this work, we study the designs and implementations of 48 public and actively used DAOs, with substantially large capital, deployed on Ethereum. We identify how three key governance mechanisms--token registration, staking, and delegation--originally introduced to improve security or participation, contribute to the concentration of voting power. Unlike prior work on centralization of voting power in specific DAOs, our findings reveal that these governance mechanisms of DAOs themselves systematically reinforce centralization. By elucidating the relationship between governance design and voting centralization, this work advances the understanding of DAO governance structures and highlights the inherent trade-offs between decentralization, security, and usability of DAOs.
Local government forms the cornerstone of democratic decentralization and grassroots governance across political systems. This study presents a comparative functional analysis of local government models—namely the Anglo-Saxon, Continental (French), and Indian systems—focusing on key areas such as policing, education, finance, and governance structures. By examining variations in autonomy, administrative control, and fiscal capacity, the paper highlights how historical, constitutional, and political contexts shape the functioning of local institutions. The Anglo-Saxon model emphasizes decentralization and flexibility, the Continental model reflects centralized supervision and uniformity, while the Indian model represents a hybrid framework balancing constitutional recognition with fiscal dependence. The analysis underscores that while local governments are universally recognized as vital instruments of democratic governance, their effectiveness is contingent upon adequate financial empowerment, functional clarity, and institutional capacity. The study contributes to the broader discourse on decentralization, governance efficiency, and democratic deepening in the 21st century. Keywords Local Government; Comparative Politics; Decentralization; Anglo-Saxon Model; Continental Model; Indian Model; Fiscal Autonomy; Governance; Public Administration; Democratic Decentralization
This paper looks at Pakistan's decentralisation policy under the Musharraf era and emphasises how it has affected the bureaucratic and administrative structure of the nation. The main contention is that Musharraf decentralization imitative were designed to improve governance and address disparities between the civilian and military sectors. The research technique, which draws from a variety of government and academic sources, involves a thorough analysis of legislative modifications, policy changes, and their practical ramification. The article summarises Musharraf's original seven-point plan, emphasising the transfer of financial and administrative authority to local levels. The national reconstruction bureau NRB and the provincial finance commission PFC were two important reforms that attempted to transfer authority and funds from the federal to local governments; nevertheless, bureaucracy and political parties posed strong obstacles to the execution, which reduced the efficacy of these changes. The results show that while decentralisation attempts enhanced women's participation and community involvement and briefly strengthened local governments, they were eventually undermined by a lack of resources, poor administration and ongoing military supervision. Although the national accountability bureau was established with the intention of combating corruption, it was criticised for being abused for political purposes. According to the report, improved coordination between different levels of government, a sincere desire on the part of the political class to maintain changes, and continued support for local government are all necessary for decentralisation to be successful. Developing institutional capabilities and promoting an open and transparent culture are essential for long-term success.
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Politics and Conflicts in Afghanistan, Pakistan, and Middle East
This paper explores the relationship between fiscal decentralization, green finance, and the digital economy in driving sustainable development, using a balanced cross-country panel dataset spanning 2014–2022, for 29 European countries. Employing dynamic panel estimation techniques, including system generalized method of moments (GMM), the research investigates how fiscal decentralization, green finance, and the digital economy (each of them individually and through interaction mechanisms), dynamically shape sustainable development performance in the presence of endogeneity and temporal persistence. The findings reveal strong inertia in sustainable development, which depends on its previous level. Fiscal decentralization has complex effects: revenue autonomy supports sustainability, whereas expenditure autonomy may undermine it, suggesting differences in how resources are used efficiently at the local versus central levels. Digitalization acts as a catalyst, boosting the effectiveness of environmental taxes and enhancing local spending outcomes. However, if fiscal administrations are not digitally integrated, digitalization may weaken the benefits of decentralized revenues. This study advances the literature by integrating fiscal, financial, and digital views, providing new insights into policy coordination.
By 2026, India's urban transition is no longer a gradual demographic shift it has become the central axis of national economic stability. Cities are now the primary engines of growth, employment, and productivity. Yet the financial architecture that supports them remains structurally weak. The 16th Finance Commission (2026–2031), chaired by Arvind Panagariya, faces a defining challenge: redesigning fiscal federalism at a moment when urban India is expanding faster than its capacity to finance itself. Urban Local Bodies (ULBs) stand at the heart of this tension. Although cities contribute a growing share to India's GDP, their financial autonomy remains constrained. The combined budget of India's 4,500+ ULBs amounts to roughly 1.3% of GDP, while their own-source revenue (OSR) generation is only about 0.6%. This gap reflects a deeper structural imbalance between expenditure responsibilities and revenue-raising powers. The weakness is most evident in property taxation the cornerstone of municipal finance worldwide. In India, property tax collections hover around 0.2% of GDP. In comparison, the OECD average stands at 1.08%, while countries like the United Kingdom (3.11%) and Canada (3.05%) demonstrate the fiscal potential of robust property tax systems. India's "property paradox" is rooted in valuation gaps, outdated rent control regimes, and extensive exemptions. Despite rising real estate values, tax realization remains minimal. At the same time, climate change has moved from a distant threat to a measurable economic variable. Heatwaves, floods, and water stress now erode an estimated 4–6% of GDP annually through productivity losses and infrastructure damage. In this context, fiscal reform must evolve into what can be called "Green Federalism" a framework that embeds climate performance within intergovernmental transfers. With the operationalization of the Bureau of Energy Efficiency-led Carbon Credit Trading Scheme, alongside the sovereign AI initiative BharatGen, Ind...
The article presents a comprehensive study of the transformation of intergovernmental fiscal relations in Ukraine under the dual influence of the fiscal decentralization reform of 2014–2020 and the unprecedented wartime shock of 2022–2025, alongside the emergence of a donor-conditional post-war reconstruction architecture. The author delineates the basic categories: intergovernmental fiscal relations, fiscal federalism, fiscal and budgetary decentralization. The author substantiates the thesis that the Ukrainian reform implemented predominantly budgetary rather than fiscal decentralization due to the dominance of shared taxes without local control over the base and rate. The impact of Law No. 3428-IX, which redirected the «military» personal income tax to the state budget from 1 October 2023, and the freezing of the reverse subvention is analyzed as an institutional precedent that distorts horizontal equalization. Growing territorial disparities are identified between the capital (39 % of municipal-level revenues in 2024), western agglomerations, and frontline communities that lost up to 45 % of revenues. The article reveals the risks of a «two-channel» community financing system through the Ukraine Facility of 50 billion euros for 2024–2027, the World Bank SURGE programme, and the European Investment Bank instruments. The author proposes a hybrid model of transformation of intergovernmental fiscal relations involving a differentiated PIT allocation rate depending on the status of the community, the replacement of the reverse subvention with a territorial solidarity fund based on a multifactor distribution formula, and an integrated project cycle with external donor instruments. Six substantive theses concerning the further architecture of the system are formulated with reference to the fiscal rules of the European Union and the subsidiarity principle of the European Charter of Local Self-Government. Particular attention is paid to the institutional strengthening of the meso-level following the Polish experience of establishing regional accounting chambers and associations of self-government.
This study explores the current landscape of fiscal decentralization in India, with particular attention tothe financial structure and functioning of rural and urban local government bodies. It investigates thecomposition and trends of own-source revenues versus intergovernmental transfers, the extent of fiscalautonomy enjoyed by local institutions, and the institutional and policy challenges that hinder effectivedevolution of financial powers. Drawing upon secondary data, government reports, and existing scholarlyresearch, the paper analyses persistent vertical and horizontal fiscal imbalances, variations across states, andthe implications of limited fiscal capacity on local governance and service delivery. Furthermore, the studyidentifies critical policy gaps, administrative bottlenecks, and capacity constraints that undermine the objectivesof decentralized governance. It concludes by proposing strategic reforms to strengthen fiscal empowerment,improve transparency and accountability, and enhance the overall effectiveness of India’s multi-tiered fiscalframework
The article provides a comprehensive comparative analysis of the fiscal decentralizatio mechanism in Ukraine and the European Union countries, with a focus on its impact on the financial capacity of local self-government. It is substantiated that fiscal decentralization is a key instrument for ensuring sustainable socio-economic development of territories, as it determines the level of budgetary autonomy, the stability of local budget revenues, and the ability of territorial communities to perform their own and delegated functions effectively. The current state and dynamics of fiscal decentralization in Ukraine during 2022–2024 are analyzed, taking into account the influence of martial law and war-related challenges on the structure of local budget revenues and the degree of dependence on interbudgetary transfers. The study conducts a comparative assessment of key quantitative indicators of fiscal decentralization in Ukraine and selected EU countries, including the share of local budgets in the consolidated public budget, the proportion of own-source revenues, the role of intergovernmental transfers, and the level of tax autonomy of local authorities. The results demonstrate that EU countries are characterized by higher financial stability of local governments, a greater share of own revenues, and more effective fiscal equalization mechanisms. Based on the analysis, quantitative benchmarks for adapting European fiscal decentralization practices to the Ukrainian context are proposed, aimed at strengthening the financial capacity of territorial communities. The findings may be used in shaping public finance policy, particularly in the context of European integration and post-war recovery of Ukraine.