After the restoration of the democracy in Nepal, the demand for spending up decentralization process has been gained ground. As a result of increasingly assertive role of stakeholders, the enactment of local self-governance Act (LSGA), 1999 in line with 9th plan, objective had been achieved providing the base for further promotion of decentralization framework in the country. Municipal financing is new concept in Nepal. Municipal financing indicates the study of various sources of revenue (both internal and external) and their collection, allocation, mobilization and utilization of those resource in such a manner that ultimate municipal goal can be achieved through it. For sustainable development effort conducted by local government to realized revenue and evaluation such performance was done through field surveys and on the basis of existing available data and reports. Simple tabular presentation percentage tools is used to analyzed data and found PSMC is not success to collect sufficient tax revenue as its possibilities. Janapriya Journal of Interdisciplinary Studies Vol. 2, No.1 (December 2013), page: 51-60
The article is aimed at determining the major problems in the financing of education sphere in the current context of the reform of decentralization of power in Ukraine and developing directions for solving them. The main directions and results of educational reform have been analyzed, and the ranking of Ukraine according to the Global Competitiveness Index has been defined. The positive points of the decentralization of education have been noted. The expenditure of the budget of Ukraine have been analyzed and the proportion of expenditure on education has been determined as to the total budget expenditure. Along with this, the main circle of problems of the budget provision for the education sector has been outlined. It has been proposed: to increase the efficiency of allocation of budgetary means at all levels of the budget system; to enhance the possibilities of educational institutions to attract additional financial resources through educational innovation, and to expand the list of paid services provided by such institutions; to decentralize education, taking into account the characteristics of development of regions, their productive potential, the demographic situation, and the interests of the territorial communities.
David Bartolini, Agnese Sacchi, Simone Salotti, Raffaella Santolini
The virtues of fiscal decentralization are usually assessed against the provision of local public goods; little is said about its impact on public finances. There is a growing concern that public finances may be negatively affected when spending and taxing powers are delegated to subnational tiers of government, especially under adverse financial conditions. Our work proves that these concerns are unfounded. The empirical investigation on 19 Organisation for Economic Co-operation and Development countries over the period 1980–2010 shows that the budget balances of central and local governments do not get worse with fiscal decentralization. Moreover, during banking crises expenditure decentralization seems to be beneficial, as the central government can easily shift resources from intergovernmental grants to financing public policies necessary to tackle the crisis. In turn, more subnational tax autonomy would improve the budget of all tiers of government, suggesting that more ‘effective’ tax decentralization increases fiscal discipline also in times of financial distress. (JEL codes: H60, H70 and G01).
Fiscal decentralization is seen as part of a reform agenda in developing countries to strengthen regional and local governments. It is believed that it improves the efficiency of public service delivery through preference matching and allocation efficiency. In light of this, this study was conducted to assess the practices of Woreda level fiscal decentralization in Addis Ababa City Government. In doing this study, explanatory mixed method research design was followed. Subjects of the study were government officials working in selected Woredas and sub-cities of Addis Ababa city. In the study, multi-stage sampling technique was used to select representative respondents. To this effect, one hundred ninety-two participants were selected using multi-stage sampling technique. Besides, sub-city and Woreda Finance and Economic Development Bureaus officials were purposely selected to conduct key informant interviews. The data gathering instruments were questionnaire, key informant interviews, and document analysis. The study followed statistical tests to test the research hypotheses. It applied Kruskal Wallis test of significance. The study involved strict respect for informed consent, voluntary participation, and confidentiality. The findings of the statistics tests indicates that respondents' responses concerning autonomy of Woredas in planning and budgeting, revenue generation and retention, expenditure assignments were significantly different. This implies that there is absence of uniformity in the practices of these aspects of fiscal decentralization in the city. On the contrary, the respondents' response concerning the functionalities of institutional and legal frameworks, inter-governmental fiscal relations, challenges, and constraints of fiscal decentralization, were not significantly different. In general, the practice of fiscal decentralization in the city was limited as existing institutional and legal frameworks were in short of clarity and uniformity. Respondents stated that Woreda administrations had weak revenue base, and need clear planning and budgeting, and expenditure assignment autonomy. Based on the findings of the study, the research hence recommended that existing institutional and legal frameworks should be structured in the way that it enables Woreda administrations to generate and utilize sufficient revenues, plan and budget their own activities, have clear autonomy of expenditure assignments. Inter-governmental fiscal relations should also be planned to reduce the vertical imbalances observed at Woreda Administration level.
Michal Plaček, František Ochrana, Milan Jan Půček, Milan Křápek
Abstract This study tests whether decentralized leadership influences the efficiency of running selected cultural institutions, specifically museums in the Czech Republic. For the analysis, data from 2015 from 187 museums spread around the whole Czech Republic are used. The method for the evaluation of efficiency is data envelope analysis, and for identifying the influence of decentralized leadership, a regression analysis is used. Museums established by municipalities reach higher efficiency than museums established by regions and central government. The causes may be found in the ability to better estimate the local demand as well as in the rational behavior of municipalities that prefer a cost-minimization strategy. The benefits of decentralization cannot be seen only in the field of finance but also in reinforcing local traditions, trust and the effects of social capital that is generated by a strong regional cultural identity.
Taxes on real property have been identified as a source of income whose potential is currently underused by many countries. Indonesia has recently decentralized the property tax to the local level, but has this led to a better use of the tax potential from this source? A look at revenue figures provided by the Indonesian Ministry of Finance suggests that reforms may have boosted tax collection at an aggregate level. However, closer scrutiny of seven local cases reveals that local governments are far from tapping the full potential of the property tax. Most of them are struggling with deficient data, low public acceptance of the tax and huge amounts of tax liabilities. in addition, local governments shy away from the political costs associated with more active revenue mobilization.
Once focus on the field of Chinese Central-local relation and policy implementation in China, we may find it hard to induce a consistent pattern, but it doesn’t mean the features are chaotic as to cannot be observed. In this paper, we mainly choose the perspective of fiscal relations between central and local governments and personnel system existed in the bureaucratic hierarchy. Based on the analysis of institutional transition of finance and personnel system, we can understand the cause of selective implementations which have been promoted by local governments as an organization (institution) or by the cadres as individuals. After 1949, China became a unified and multiethnic socialist country. Since then, center and local governmental relations are lasting to play an important role in the development of the country. In the view of the governmental organizations, we can see the different and subjective interests of the two parts (center and local governments), which hold most of the county’s resources and authority of the financial distribution, using the macro directions and the micro policies to distribute the resource and generate benefits in the name of the whole value of the people who they should response to , and without showing their own purposes in different ways of interpreting policies. In the other view of the individuals who are working in the government, we can also see how the personnel system influences the behaviors of cadres in different levels of the governments and how they use power to make their own benefits in the name of the whole value of governance. Not only the governmental organizations, but the cadres themselves can influence the implementation of policies, and the selective implementation is a complex and interesting phenomenon to be understood in China.
The debates on the devolution of powers to the panchayats since the last two decades received enormous attention because of the increasing role played by these institutions in planning and implementation of the development programmes in rural India. But it is observed that devolution agenda including the agenda of fiscal devolution and tax decentralization has not been taken up sincerely in many states including the states of Andhra Pradesh and Odisha. Based on the review of secondary data, the present article critically examines the status of the fiscal devolution to the panchayats in the states of Andhra Pradesh and Odisha. This article argues that both the states need to strengthen the own revenue of panchayats based on the recommendations of the Finance Commissions of the respective states. In this context, the process of tax decentralization and principles of sharing the state taxes should receive paramount importance.
Smriti Ranjan Bhattacharyya -, A. Dey, Gautam Bandyopadhyay
INTRODUCTION:Governments at all levels have to play a major role in developing urban infrastructure which strengthens the base of an economy. Indian Constitutionhas provided for a three tiers federal structure (Union, State and Local) specifying the powers and responsibilities for all the tires of the governments. Therefore, it is the desired intention of the Constitution that all the tiers of the Governments work in a co -ordinated manner well within limits of the Constitution for urban infrastructure development. Third tier of Governments are generally termed as local self-governments and it has two wings, one which operates in the rural areas and the other in the urban areas. Constitutional status has been provided to these local governments through the 73th and 74th Constitutional Amendment Acts, 1992. Local self-governmentoperating in urban areas are commonly known as Urban Local Self Governments.Prior to the Amendment Act, the plan for local infrastructure development were used to be drawn by the upper tier governmentswhere local requirement would not be considered. Therefore, the amendment is a direction to the state governments for transfer of power and responsibilities to the local governments with respect to preparation of plans for economic development and social justice, and also for the implementation of development schemes as may be required to enable the local governments to function as institutions of self-government. Unfortunately the issue of empowerment of the local selfgovernments has been left at the discretion of the state governments and as a result legislation primarily aims to make urban local bodies accountable to their stategovernment rather than to the citizens (The World Bank, 2007).Urban Local Self Governments (hereinafter referred to as ULSG) are of three types: (i) Nagar Panchayats for areas in transition from a rural area tourban area; (ii) Municipal Councils for smaller urban areas; (iii) Municipal Corporations for larger urban areas.India is also in the stage of rapid urbanization like other countries in the World and the constitution has provided different and concurrent list of works for different levels of governments. The role of ULGs, after becoming statutorily responsible for providing basic infrastructural facilities and maintenance of the same in the urban areas, has become more and more important.ULSGs find it difficult to balance between the limited financial resources and the unlimited needs for public services. (Tesu, 2011).FINANCIAL ANALYSIS OF ULSGs:ULSGs are statutorily responsible to carry out decentralized functions effectively and this requires presence of two important elements: adequate level of revenue either raised locally or transferred from the central government and the authority to make decisions about expenditures (Meddzi and Gondo, 2010). Finance of ULSGs consists of two major sources: own source and external source. Own source of receipts basically includes tax and non-tax receipts within the assigned power whereas external source constitutes a major portion of grant and assignments from upper tiers including contribution from others, loan from bank or financial institution and fund raised through issue of bonds.Psycharis and Iliopoulou(2016) have commented that local municipalities in Greece have a limited extent of tax or other forms of fiscal autonomy and therefore still rely heavily on fiscally centralized revenue sources. This situation also prevails in the ULSGs in India. Several literaturesshow that the dependency is due to the constitutional imbalance between the enormous functions and legitimate source of finances. ULSGs in India have lowest tax base (property tax, advertisement tax etc.)and upper tiers enjoy higher tax bases. Therefore,funds collected by the upper tiers are devolved to the lower levels of governments but not at the desired level. In order to resolve the imbalance, the amendment act has stated for constitution of state finance commission in every state which in addition to finance commission constituted by the central government. …
Abstrak: Produktifkah Human Capital Investment oleh Pemerintah Daerah Provinsi dalam Era Desentralisasi? Efektivitas pengeluaran pemerintah khususnya human capital investment dalam meningkatkan produktivitas tenaga kerja juga tergantung dari pemilihan pemda dalam menentukan jenis pengeluaran tersebut. Tujuan dari penelitian ini untuk mengetahui pengaruh pengeluaran belanja pemerintah secara umum maupun secara fungsional terhadap produktivitas tenaga kerja melalui pendekatan kuantitatif dengan metode ekonometrika. Penelitian ini menggunakan data sekunder dari ringkasan APBD pemda seluruh Indonesia yang disediakan oleh Kemenkeu Dirjen Perimbangan Keuangan Daerah RI. Data yang digunakan adalah data tahun 2012 dengan unit analisis perekonomian level provinsi seluruh Indonesia. Pengeluaran pemerintah provinsi secara total tidak mempengaruhi produktivitas tenaga kerja regional. Pengeluaran pemerintah daerah provinsi dalam fungsi human capital investment tidak efektif meningkatkan produktivitas tenaga kerja meski demikian pengeluaran pemerintah dalam bidang fasilitas umum dan perumahan mempengaruhi secara positif produktivitas tenaga kerja regionalnya. Kata Kunci: pemerintah daerah, human capital investment, produktivitas tenaga kerja, desentralisasi fiskal, pengeluaran pemerintah Abstract: Is The Human Capital Investment of Provincial Governments Productive in Decentralization Era? The effectiveness of government spending, especially investment in human capital, increases labor productivity also depends on how the local government determines the type of expenditure. The purpose of this study is to determine the effect of government spending in general and functionally to labor productivity. The approach used in this study is a quantitative approach, econometric method. This study uses secondary data from local government budgets across Indonesia summary provided by the Indonesian Ministry of Finance Directorate General of Regional Financial Balance. The data used is the provincial-level economic analysis units throughout Indonesia in 2012. This research shows that provincial government spending in human capital investment does not effectively increase labor productivity. Total provincial government spending does not affect the regional labor productivity. Government spending in the areas of public facilities and housing positively influence regional labor productivity. Keywords: local government, human capital investment, labor productivity, fiscal decentralization, public spending
Laura Monteiro de Castro Moreira, Felipe Ferré, Eli Iôla Gurgel Andrade
The Decrees 4279/10 and 7508/11 established norms to guide health politics, with impacts on funding of the Middle and High Complexity Hospital and Outpatient. To verify the effects on the consolidation of care networks in Minas Gerais, we performed an analytical-descriptive study of the National Health Fund from 2006 to 2014. We observed decentralization of responsibilities, accompanied of resources and innovative financing mechanisms, resulting expansion of the network care model. The federal government definitions suggest reduction of the autonomy and limitation of regional solutions.
The article analyses the directions of tax management in the context of budgetary decentralization. The paper aims to research tax management in the system of forming local budgets in the conditions of financial resources decentralization and analyze the current tools of tax management on the local level. In spite of a great number of researches, the issue of tax management in strengthening financial independence of local budgets is not enough studied; therefore, to reach financial independence of local communities it is necessary to adopt new normative and legal acts concerning decentralization of financial resources taking into account tax potential of each territorial community. The lack of financial resources causes the problem of optimal redistribution of power among central and local authorities. The author proposes the new mechanisms of solving the current problems on the example of local budget of the city of Uzgorod to contribute budgetary decentralization. The principal idea while conducting the reform of the budgetary process must be the adoption of certain changes in budgetary legislation which have to shift the mechanisms of budgetary financing and equating local budgets. The author concludes that the progressive vector of well-being increasing completely depends on the developed concept of regional economic policy. The article pays attention to the importance of taking into account the tax potential of a territory and characterizes the directions of strengthening financial independence of local government.
China economic development has entered a new normal. Consumption plays a more and more important role in promoting economy. Based on the empirical statistics, we adopted the VEC model to analyze the dynamic linkages and influences between public expenditure and consumption. The conclusion is there are different impacts between central and local public expenditure, and in the long run, only the latter has a strongly positive effect on consumption. So trying to coordinate the relationship between central and local finance is of vital importance under the background of economic transition.
Abstract: This writing to determine the level of development of the financial capacity of Makassar in order to support the implementation of regional autonomy and Local Revenue Contribution to the Budget Revenue and Expenditure Makassar fiscal year 2007-2011 . The results of the study, the ratio of the regional of financial independence obtained an average yield of 18.30% on the pattern of relationships are instructive. The ratio of the degree of fiscal decentralization and routine capability index ratio shows the ability of local finance is less, amounting to 15.39% and 24.99%. In harmony ratio, routine expenditure is greater than the gap of development expenditure amounted to 25.60%. The ratio of growth, overall experience negative growth, due to an increase in local revenue and total revenue not followed by construction spending growth, but it is followed by the growth of expenditures. Local Revenue Contribution to the Budget Revenue and Expenditure, still less, amounting to 15,39%. By looking at the results of the analysis, development of the financial ability of the city of Makassar in the implementation of regional autonomy were deemed to be lacking. Keywords: R egional autonomy, financia l , Makassar City Abstrak: Tulisan ini bertujuan untuk mengetahui tingkat perkembangan kemampuan keuangan Kota Makassar dalam rangka mendukung pelaksanaan otonomi daerah dan konstribusi Pendapatan Asli Daerah terhadap Anggaran Pendapatan dan Belanja Daerah Kota Makassar tahun anggaran 2007-2011. Hasil penelitian, rasio kemandirian keuangan daerah yang memperoleh hasil rata-rata sebesar 18,30% atau berada pada pola hubungan instruktif. Rasio derajat desentralisasi fiskal dan rasio indeks kemampuan rutin yang menunjukkan kemampuan keuangan daerah masih kurang, yaitu sebesar 15,39% dan 24,99%. Pada rasio keserasian, pengeluaran belanja rutin lebih besar dibandingkan dengan belanja pembangunan dengan gap sebesar 25,60%. Rasio pertumbuhan, secara keseluruhan mengalami pertumbuhan yang negatif, karena peningkatan pendapata asli daerah dan total pendapatan daerah tdak diikuti oleh pertumbuhan belanja pembangunan, tetapi diikuti oleh pertumbuhan belanja rutin. Konstribusi PAD terhadap APBD, masih kurang, yaitu sebesar 15,39%. Dengan melihat hasil analisis tersebut, perkembangan kemampuan keuangan Kota Makassar dalam rangka pelaksanaan otonomi daerah dianggap masih kurang . Kata kunci: Otonomi Daerah , Keuangan , kota Makassar
Lakshmi Prasad. Chinthalapalli, Y. V. Lakshmana Rao
The sustainable development of State requires infrastructure and good governance system i.e. Infrastructure, decentralized administration, digitalization, technology based E-governance; infrastructure finance will help the government of Telangana to attain the new heights of economic growth and development. The development process of Telangana is a better design through T-hub, Policy initiatives and peoples participation.
This article concerns capital taxation and public good provision in a two-layer fiscal union where the federal government uses lump-sum transfers to redistribute resources between two local jurisdictions, and where each local government uses a capital tax and a lump-sum tax to finance the provision of a local public good. The novelty is to allow for simultaneous horizontal and decentralized leadership (double leadership) which means that one of the local governments is able to exercise Stackelberg leadership both vis-a-vis the other local government and vis-a-vis the federal government. Among the results it is shown that the capital tax becomes redundant as a policy instrument for the double leader if the other state government acts as a decentralized leader vis-a-vis the federal government. If, instead, the other state government does not exercise leadership vis-a-vis the federal government then the double leader will implement a capital tax which is allocatively efficient from the perspective of the fiscal union as a whole. It is also shown that double leadership exacerbates the under-taxation inefficiency that earlier research has shown exists in a fiscal union with decentralized leadership.
Using a new enrollment dataset of Shanghai public colleges for 2009, we investigate whether the increase in the stratification of Chinese higher education is attributed to the decentralization of higher education finance. We discover that colleges in Shanghai not only admit significantly more in-province students (which we refer to as quantity bias), but also quietly place more out-of-province students, especially those from poor provinces, in low-paying majors (which we refer to as quality bias) when tuition is regulated by the central government. Both types of biases are more obvious in local colleges funded primarily by the Shanghai municipal government than in national colleges jointly funded by central and municipal governments. Our findings provide suggestive evidence that the decentralization of higher education finance in China deeply exacerbates the inequality of higher education opportunities.
It is undeniably that the fiscal autonomy of local government authorities constitutes a critical component of any financial decentralization in both developed and developing countries.It gives local government authorities freedom to impose taxes, generate revenue within their areas, allocate their financial and material resources, determine and authorize their annual budgets without external motivate.The fiscal component of local governments in Tanzania Mainland is mannered by the Constitution of the United Republic of Tanzania, 1977 and The Local Government Finances Act, 1982.Despite such recognition, powers of local government authorities in relation to local government finance are still, limited by central government.These limitations do not only deny local governments requisite powers to adequately raise revenue from their own sources and borrowings but also inhibit their ability to determine and approve such annual budgets.
Sustainable and inclusive growth in emerging Asian economies requires continued high levels of public sector investment in areas such as infrastructure, education, health, and social services. These responsibilities, especially with regard to infrastructure investment, need to be devolved increasingly to the regional government level. However, growth of sources of revenue and financing for local governments has not necessarily kept pace, forcing them, in some cases, to increase borrowing or cut spending below needed levels. This chapter reviews alternative models of the relationship between central and local governments, and provides an overview and assessment of different financing mechanisms for local governments, including tax revenues, central government transfers, bank loans, and bond issuance, with a focus on the context of emerging Asian economies. The chapter also reviews financing mechanisms for local governments and mechanisms for maintaining fiscal stability and sustainability at both the central and local government levels. Based upon the evidence on the decentralization process in Asia, it proposes some policy implications for improving central–local government relations and fiscal sustainability.
Fiscal decentralization demand the regions to improve their creativity in collecting funds for financing local expenditures according to their needs (self-financing). The objective of this paper is to identify problems and challenges in enhancing local own-revenues faced by the local governments. This research used the qualitative method by comparing two case studies on the enhancement of local own-revenues. Both the local governments of A and B face problems in optimizing local ownrevenues. the enhancement of local own-revenues is faced with two main challenges. For undeveloped regions, the challenge is the making of an urban-biased policy and for regions with urban characteristics the challenge is the emergence of urban problems due to high business opportunities in the urban regions. Another challenge faced by every local government is dependency on the sector of local taxes as the sector with large contribution to local own-revenues.
Income and property taxation are among the most prevalent policy instruments to finance local expenditure in countries with a high degree of decentralization. However, little is known about their relative efficiency and redistributive properties. This paper compares both tax instruments within the same framework and investigates their relative attractiveness to finance local expenditure. It further allows for inter-municipal spillovers and rivalry in the consumption of the publicly provided good. The analytical model identifies the different inefficiencies in both tax regimes which include intra- and inter-municipal free-riding. In a numerical illustration, the model is solved for the resulting equilibria. This allows to quantify the gross welfare loss from decentralization and also reveals a decomposition of the welfare loss into its components.
Fiscal decentralization has been established in the People’s Republic of China (PRC), but crises emerge at the local government level due to remaining problems of the fiscal administration system of tax allocation and the impact of replacing the business tax with a value added tax. The PRC taxation system requires readjustment and local governments have begun to focus on innovative financing models. The main path to stable and sustainable government finances is to maintain the general public budget and the government fund budget. The present chapter shows that use of innovative fundraising and financing channels will lead to the upgrading of local government infrastructure and public services. Suggestions for enhancing local government fiscal stability and sustainability include: reducing the fiscal burden at the local level by standardizing and legalizing outlay establishing a modern taxation system; establishing a standardized and predictable transfer payment system by introducing block transfer payments and prioritized transfer payments as a basis for a stable growth mechanism for general transfer payments; promoting public–private partnership legislation to encourage participation of social capital and maximize the multiplier effect of public expenditure; and improving the mid-term budget and debt-annexed budget and establishing a government planning mechanism for investment and debt financing of major infrastructure construction projects.
Fiscal decentralization has increased the Local Revenue but allegedly still many governments prefer to suspend the local expenditure financing at matching grant. This study purpose is to obtain empirical evidence the phenomenon of fiscal illusion with income approach (revenue enhancement), and also to obtain empirical evidence the effect of Fiscal Decentralization on Capital Expenditure, Economic Growth, and Human Development Index for district/cities in Bali Province. Multiple regression analysis with SPSS V.20 software was used to test the phenomenon of fiscal illusion and research hypotheses. The results showed that there is no fiscal illusion in expenditure financing for district/cities in Bali Province. Also found that: 1) Fiscal Decentralization has no effect on Capital Expenditure, Economic Growth, and Human Development Index, 2) Fiscal Decentralization affect on Capital Expenditure, Economic Growth, and Human Development Index for districts/cities with level of financial independence below the average in Bali Province, 3) Fiscal Decentralization affect on Capital Expenditure, Economic Growth, and Human Development Index for districts/cities with financial independence level above average in Bali Province. Keywords : fiscal illusion, local revenues, general allocation fund, local expenditure, capital expenditures, economic growth, human development index
Jan 1, 2017·Proceedings of the International Conference on Administrative Science, Policy and Governance Studies (ICAS-PGS 2017) and the International Conference on Business Administration and Policy (ICBAP 2017)
Whether fiscal decentralization is good for reducing communal conflict is still debatable. This study examines the linkage between fiscal decentralization and communal conflict in Indonesia, administrative decentralization, and political decentralization is examined as well. Data come from the Village National Census (Podes) 2008-2014 (N=234,717). Results of twolevel logit regression show that fiscal decentralization not significantly associated with reducing communal conflict. The findings suggest that decentralization work for reducing communal conflict through better capacity of local bureaucrats rather than through financing capacity in delivering public services and the enhanced opportunities for channeling citizen participation in direct political participation.