The local governance in Ghana has been practised using different models over the years. These models were introduced by the colonial government which was highly centralised. The dynamics of local government in Ghana changed significantly in 1988, when decentralised system of local government was introduced. Several dimensions of Metropolitan governance in Ghana have been considered ineffective and among them is the fiscal administration which attracts several unpleasant comments from the citizenry. Notwithstanding the fact that the Local Government system in Ghana was instituted in 1852 and independent town councils were established in Sekondi- Takoradi and Kumasi in 1894 and 1935 respectively; none of them is free from this allegation. The purpose of the research was to analyse the financial systems of the metropolises. The Metropolises on average generate just about 45 per cent of its total income internally. This is a case of overdependence on transfers from the Central government and other external sponsors. Therefore, it is not strange that the Metropolitan governments are financially controlled by the Central government. The uninformed mind may prescribe more local fiscal empowerment for the Metropolises as the way forward. However, empowerment with poor fiscal administration could hardly turn the tide. As the study revealed, the system of fiscal administration is influenced by political, economic, social, technical administrative and attitudinal factors. The local tax structure has only one main item namely immovable property tax which is poorly administered in terms of tax base determination; low rate impost and poor mobilization. The large immovable property tax is left in arrears and eventually written off. The metropolitan financial performance also needs improvement from within. MMDAs, introduction of new revenue items and increase in rates as basis for increasing internal revenue, hence many of them have expanded revenue structure with several unproductive items. This does not make local revenue mobilisation cost effective. The MMDAs over depend on external funds for their operation, thus compromising the autonomy of local authorities. To overcome this might require a long term fiscal strategic plan which should reconsider the fiscal empowerment relationship between central and local government. The local authorities on their part should shift toward partnership investment as a means of achieving financial breakthrough otherwise the decentralisation system would become a mirage to local residents who initially accepted it as system for accelerated local development.
From the perspective of local deficit financing,this paper explores the internal logic working between fiscal decentralization and local government's land finance. Theoretical analysis shows that local deficit expansion caused by fiscal decentralization in China has become an incentive for local governments to grab off-budgetary financial revenue,which impels them to take an active land finance strategy to increase local fiscal revenue. The empirical test supported by provincial panel data also proves that the fiscal decentralization and local deficit financing both have obvious positive driving effects on the land finance.
Using the annual data in 20 years during 1993-2012 as samples,this paper analyses the possible variables that may affect the local governments and their officials' behavior when they are carrying out the urbanization investment and financing since the reform of Chinese tax sharing system.The results show that:the promotion incentives,the fiscal decentralization and the industrialization drive have a significantly positive correlation to the investment and financing scale of land urbanization,while private property protection level has a significantly negative correlation.This paper points out that the catch-up strategy of unbalanced development model is the deep-seated reasons for the above system arrangement,and is the key to realizing the coordinated development between the land and population urbanization,as well as the balanced development between urban and rural sectors,the industrial and agricultural sectors.
From the perspective of local deficit financing,this paper tries to expound the internal logic between fiscal decentralization and local government 's land finance. Theoretical analysis shows that: fiscal decentralization in China aggravates local deficit financing, and the latter becomes an incentive for local governments to grab offbudgetary financial revenue, which will impel them to take active land finance strategy to increase local fiscal revenue. At the same time, our empirical test among them using provincial panel data shows that fiscal decentralization and local deficit financing both have obvious positive driving effects on land finance. Finally, we put forward a series of suggestions on land finance governance respectively from the following 5 aspects: deepening tax distribution reform, improving local fiscal revenue structure, changing land finance formation mechanism, promoting administrative performance evaluation mechanism and strengthening budget supervision.
The research of fiscal decentralization is based on the reconstruction of measurement index.In view of the combination of fiscal decentralization principles and its reality in China,the paper devises seven measurement indexes of fiscal decentralization,makes an empirical analysis of their corresponding effects on economic growth,and estimates the economic effect of the fiscal decentralization reform in counties directly administered by province.The paper gives support to the significance of revenue and expenditure decentralization within the system and gives decision-making power to county-level governments.However,the contribution of full-covered measurement index of fiscal decentralization to the economic growth is not ideal.Therefore,it is urgent to endow the county-level governments with financial resources and decision-making power within system,to tighten the control of their non-budget financing,and to intake the counties administered by province into the new type of fiscal system featuring the match of financial power and responsibility.
The prime aim of this thesis is to examine the link between fiscal decentralization and local financial governance in fiscally empowered woreda administrations (districts) of the Amhara region in Ethiopia. Local financial governance has been one of the reasons and arguably the crucial one that drives many countries to subscribe to fiscal decentralization. The presumption is that public finance mobilization and spending can be implemented in a more efficient, responsive, transparent and accountable manner at the local government level than at the centre. Nonetheless, empirical studies show that the linkage between fiscal decentralization and these local financial governance benefits is not automatic. Several developing countries that have tried to implement fiscal decentralization have failed to realise the promised financial governance gains largely due to design and implementation flaws. A review of the various theoretical perspectives suggest that local financial governance is not a factor of just devolution of fiscal power but also other intervening forces such as financial management system, citizen voicing mechanisms and the social and political context. It is within the framework of this theoretical argument that this study sought to investigate how
the mixed and incomplete efforts of the district level fiscal decentralization program in the Amhara region has impacted on financial governance of woreda administrations. The study assesses the efficacy and role of various initiatives of the district level decentralization program of the Amhara region, such as the fiscal empowerment of woredas; financial management system reforms; citizen voicing mechanisms and political party structures and system in influencing woreda financial governance. To this end, the investigation process largely took the form of an interpretative approach employing a combination of various methods of gathering the required qualitative and
quantitative data from respondents and documents in the selected four case woredas or
districts. Findings on the assessment of the intergovernmental relations to measure the adequacy of devolution of fiscal power indicate that, despite the constitutional provision that affords the woredas the power to mobilize and spend public finance for the provision of various local public services, several design and implementation shortcomings have constrained woreda administrations from exercising such power effectively. As a result, the district level fiscal decentralization framework of the Amhara region appears to have features of decentralization by de-concentration rather than by devolution. Despite the extensive financial management reforms that have been undertaken, the research findings indicate that the financial management system in woreda administrations faces a range of challenges triggered largely by important design and implementation shortcomings. It is observed that the ‘getting the basics right first’ reforms in various financial management processes of woreda administrations are not only…
José M. Alonso, Judith Clifton, Daniel Díaz‐Fuentes
The Spanish Agency for the Evaluation of Public Policies (Agenda Estatal de Evaluatión de las Políticas Públicas y la Calidad de los Servicios — AEVAL) was established in 2007. One of the original justifications for creating this agency was to improve public policy evaluation with the end result of improving government’s coordination of public policy implementation in the context of a decentralized Spain. From the 1980s, Spain had been transformed from a highly centralized system to a decentralized territory composed of 17 regional governments, or Autonomous Communities, henceforth, ACs. Improving coordination was not the only reason to establish AEVAL, but it is on this task that this chapter focuses. Other important objectives included: promoting a more rational use of public resources; improving public service quality; and bolstering accountability to citizens. However, in the period leading up to its final creation, the political complexities underlying the urge to improve coordination issues as a result of decentralization became apparent. Today, the AEVAL functions as an evaluator of public policy, but significant issues related to coordination practices between central and regional governments remain. This chapter presents and evaluates AEVAL as regards its creation, organization, functions and performance to date. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
The implications of delegating fiscal decision making power to sub-national governments has become an area of significant interest over the past two decades, in the expectation that these reforms will lead to better and more efficient provision of public goods and services. The move towards decentralization has, however, not been homogeneously implemented on the revenue and expenditure side: decentralization has materialized more substantially on the latter than on the former, creating vertical fiscal imbalances. These imbalances measure the extent to which sub-national governments' expenditures are financed through their own revenues. This mismatch between own revenues and expenditures may have negative consequences for public finances performance, for example by softening the budget constraint of sub-national governments. Using a large sample of countries covering a long time period from the IMF's Government Finance Statistics Yearbook, this paper is the first to examine the effects of vertical fiscal imbalances on fiscal performance through the accumulation of government debt. Our findings suggest that vertical fiscal imbalances are indeed relevant in explaining government debt accumulation, and call for a degree of caution when promoting fiscal decentralization.
Decentralization is the allocation of power between central and lower levels structures of the government. The dimensions and the extent to which powers are transferred from one level to another vary across countries depending on the goal a country wishes to achieve. But one of the common aspects included in the transfer of powers to the lower level structures is financial decentralization. The reason is clear. It makes no sense to transfer power to the lower level structures without finance to execute own decisions. Transfer of financial powers to lower level structures and creating an alignment that support efficient and effective operation of each structure, has often been one of the major challenges in the implementation of decentralization model of government. Tanzania has been one of the victims in this situation. In view of various government reports, since independent in 1961, the several attempt tried by the government to transfer powers to the lower level structures led to either little or no success. The adoption of Decentralization by Devolution (D by D) in 2000 could be considered as the government attempt to correct the existed bottlenecks that led to the failure in the previous initiatives to decentralise. This paper attempts to answer the question: ‘is financial decentralisation realised under the DbyD, and what are the factors that contribute or hamper the financial decentralisation? The paper is based on the research findings presented in Mbogela (2009). The report consisted of descriptive presentation on financial matters from four case councils namely: Mbozi District council, Mbeya City council, Mbeya District council and Morogoro Municipal council. The findings from the four cases are presented, examined and compared. Keywords: Decentralisation by devolution, financial management, Local government authorities.
Decentralisation and devolution in conducting of public affairs from higher to lower level of government was implemented in Croatia in 2001 in elementary and secondary education, health care, social welfare and firefighting. It was not true decentralization, with the expansion of the local authority, responsibility and financial capabilities, rather mere administrative decentralization, without spreading the autonomy of the local community. Legal decentralization was not accompanied by fiscal decentralization, which involves financial aspects of transfer of public affairs to regional and local government. The degree of fiscal decentralization of certain government is estimated by the proportion of local government involvement in total revenues and expenditures of the general government and the local government share in GDP. None of these indicators in Croatia are reaching the EU average. Financing of decentralized functions from income tax in the past five years indicates enormous problems in financing due to total dependence of local communities on the central government, especially in the area of primary and secondary education. In such circumstances, the local management, responsible for the efficient and economical operation of the management and disposal of funds for decentralization, is facing organizational challenges.
INTRODUCTION Since emerging from the Asian financial crisis of 1997–98, Indonesia has embarked on a period of steady economic expansion and growing prosperity. Even by East Asian standards its post-crisis growth has been rapid, and Indonesia joined the ranks of middle-income countries in 2011. The benefits of growth have been shared widely across the population and poverty has declined significantly. Economic growth coupled with prudent macroeconomic management has resulted in increasing revenues for the government, giving it the opportunity to invest more heavily in sectors vital to future development. Democratic decentralization began in parallel to multi-party elections at the national level in 1999. This has made locally elected governments responsible for providing basic public services to their electorates and shortened the lines of accountability between district populations and those responsible for local development. These trends have had far-reaching consequences for the education sector. Education has been a key beneficiary of increased government spending. In 2009, a constitutional obligation for government to commit a fifth of the total budget to education was first achieved, releasing an avalanche of new funding. Since 2001, decentralization of the education system has meant that local governments have played a more direct role in setting sectoral priorities and in managing and financing their education systems. The purpose of this chapter is to assess the impact that these changes, mainly the increased investment in education and the decentralization of management, have had on education sector performance. We will show that the recent increases in education spending by government and households alike have been associated with significant improvements in access to education, particularly among the poorest and most disadvantaged. Advancements in the quality of education, however, have been far harder to achieve. We argue that this disappointing result has been driven partly by unsuccessful but expensive policies aimed at improving teacher quality, but also by significant public spending inefficiencies at the district level associated with shortcomings in intergovernmental transfer mechanisms and weaknesses in local governance. Maintaining the impressive advances in the education sector will require improvements in the quality of spending. Improving governance of the education system will be crucial to these efforts.
Abstract The process of decentralisation of public administration was based on the transfer of competences from state administration to municipalities and on the setting of new conditions for financing of municipalities. In the process of decentralization of public administration and fiscal decentralization, the range of original and transferred competences, as well as the tasks of municipalities and the corresponding instruments of financing, were set there by mutual agreement between the state bodies and the local self-government. The transfer of competences on municipalities in the field of education was not a simple process. The first steps in the management of schools and educational facilities did not entail without problems. Many of the misunderstandings grew up mainly from a lack of knowledge of the relevant laws governing the specific educational and training activities, operation, financing, personnel and material-technical provision of schools and educational facilities. The aim of the contribution is legislative and financial definition of current system of provision of services by municipalities in the Slovak Republic in the field of regional education, because this area is complicated and disorganized the laws dealing with education and its financing have undergone many amendments. The following compact and comprehensive issues can serve as a framework for further research.
Functional decentralization is aimed at increasing the efficiency, effectiveness and quality of public services, among other advantages, by simplifying the organizational structure and by achieving greater proximity to the end user. Nonetheless, the creation of these entities has been criticized because of the potential to make political use of them to avoid the debt limits imposed on sub-national administrations, as debt would then be transferred to the accounting statements of these agencies. The empirical evidence found in the current study shows that the use of these companies as a mechanism for obtaining external financing is determined by the accounting regulations applicable in relation to the consolidation of accounts. Decentralization processes oriented toward increasing debt are more common among left-wing local governments and are strongly linked to fiscal pressure. Points for practitioners Our results show that foundations are now displacing public companies in decentralization processes in order to obtain external funds, since these agencies are not included in the consolidated accounts. Thus, more rigorous regulation should be established in Spain. This opportunistic use of decentralized agencies is developed on the whole by left-leaning political ideologies as a means of incurring more debt that they need. Thus, it is necessary that external auditing offices ( Cámaras de Cuentas) reinforce the monitoring process over local governments in order to circumvent their managerial discretion.
The general purpose of this study is to thoroughly examine decentralization in education according to the literature and previous research, and to discuss the applicability of educational decentralization practices in Turkey. The literature was reviewed for the study and findings reported. It has been observed that decentralization in education practices were realized in many countries after the 1980’s. It is obvious that the educational system in Turkey has difficulty in meeting the needs, and encounters many problems due to its present centralist state. Educational decentralization can provide effective solutions for stakeholder engagement, educational financing and for problems in decision making and operation within the education system. However, the present state of local governments, the legal framework, geographical, cultural and social features indicate that Turkey’s conditions are not ready for decentralization in education. A decentralization model realized in the long run according to Turkey’s conditions, and as a result of a social consensus, can help resolve the problems of the Turkish education system.
The purpose of this article is to compare systems of fiscal decentralization in EU member states according to selected quantitative criteria. The results indicate that a higher number of lower levels of government usually indicate a greater share of local finance; however, this finding does not confirm the inverse link. Although the structure of expenditures is similar, the shares of funds for the implementation of individual tasks differ significantly. On average, the countries allocate most funds to education, social security, healthcare, and administration, with only a quarter of the countries recording the same or higher amounts of revenues than expenditures. Most countries still cover the existing deficit through transfers from the central government, equalization schemes, or borrowed funds.
Dubravka Jurlina Alibegović, Sunčana Slijepčević, Željka Kordej-De Villa
Decentralization can be generally described as a process in which selected functions are assigned to sub-national units. The literature identifies number of positive consequences of decentralization which all lead to better satisfaction of citizens? needs for public services. Although decentralization process in Croatia started more than 10 years ago, it still has not been finished. It led to new division of authorities and responsibilities to the local government units, but the level of fiscal decentralization remained lower than in the EU countries. The efficient decentralization should incorporate delegation of authorities, responsibilities and resources to local government units based on the clear criteria, but also should ensure better coordination and cooperation of all entities in providing public functions. In the paper we analyze fiscal capacity of local government units to provide an insight into the main problems of decentralization in Croatia. We show that the most of local government units have very low fiscal capacity and cannot finance basic public functions from their own resources. The paper also presents result of the performed survey about decentralization process among local councilors at the regional level in Croatia. We explore how local councilors at regional level in Croatia evaluate different goals of decentralization. Having in mind the lack of fiscal capacity, we identify two possible solutions for an optimal provision of public functions. The first one is level of political will for the joint provision of public functions between different local units, and the second one is change in territorial division of the country. We measure the difference in the attitudes toward these questions across counties.
<p class="Abstract1">The regional autonomy in Indonesia gives the implication to the shift of authority between the center and local government in many sectors. The regional autonomy also makes the decentralization that related with the local financing management, the economy planning including the local planning and other planning that shifted from the central government to the local government. The study aims to know the effect of fiscal decentralization from the income and spending aspect towards the local economic development in Indonesia (gas and oil nationally). The method analysis in this study is the panel data from 1995-2000 and 2001-2004.The result shows that before decentralization on the year of 1995-2000, the fiscal decentralization whether from income or spending aspect has negative influence to the economy growth. Coming into decentralization from 2001-2004, the fiscal decentralization on supporting the economy development, whether from government income or spending is increasing. But the fiscal decentralization is exceeding the spending aspect compare to the income, whether in national level, with oil and gas or without oil and gas, inside Java or outside Java. <p class="Keyword1"> <p class="Abstract2"><strong></strong>Pelaksanaan otonomi daerah di Indonesia membawa implikasi pada pelimpahan kewenangan antara pusat dan daerah dalam berbagai bidang. Adanya otonomi daerah maka terjadi desentralisasi yang menyangkut pengelolaan keuangan daerah, perencanaan ekonomi termasuk menyusun program-program pembangunan daerah dan perencanaan lainnya yang dilimpahkan dari pusat ke daerah. Studi ini bertujuan untuk mengetahui pengaruh desentralisasi fiskal dari sisi penerimaan dan pengeluaran terhadap pertumbuhan ekonomi daerah provinsi di Indonesia (nasional dengan migas dan tanpa migas, di Jawa dan di luar Jawa). Metode analisis yang digunakan dalam penulisan studi ini menggunakan data panel secara terpisah pada periode 1995-2000 dan 2001-2004. Hasil analisa menunjukkan bahwa sebelum pelaksanaan era desentralisasi periode 1995-2000, pengaruh desentralisasi fiskal dari sisi penerimaan dan pengeluaran berpengaruh negatif terhadap pertumbuhan ekonomi, baik untuk tingkat nasional dengan migas dan tanpa migas, di Jawa dan di luar Jawa. Memasuki era desentralisasi selama kurun waktu 2001-2004, pengaruh desentralisasi fiskal dalam mendorong pertumbuhan ekonomi, baik melalui sisi penerimaan maupun pengeluaran mengalami peningkatan dibandingkan sebelum era desentralisasi. Namun pengaruh desentralisasi fiskal tersebut jauh lebih besar melalui sisi pengeluaran dibandingkan sisi penerimaan daerah, baik di tingkat nasional dengan migas dan tanpa migas, di jawa maupun di luar Jawa. <p class="Keyword1">
Hava Mucolları, Alba Dumi, Zaim Korsı, Elisabeta Duçellari
This paper includes partnerships with community-based organizations, public and private colleges, universities, public school teachers, public health departments. Additionally, more number of community leaders have been trained to deliver educational workshops; PSI has developed a robust workshop leader database, which permits remote access to (and entry of) service delivery information. This will be an important point of administrative changes in Albanian public policies as an obstacle to the operating foreign investments, comparison of EU. Entrepreneurship ambition has worked to support changes in Albanian law that would offer anti-discrimination protections in keeping with international standards. Another point of administrative changes in Albanian public policies as an obstacle to the operating foreign investments, comparison of EU is: (1) International investments contributed to the improvement of Albania’s financial regulatory environment which has strengthened public confidence in the banking system and has provided a more secure, efficient and transparent financial system to meet the credit, savings and insurance needs of businesses and individuals. The paper provides support for legislative initiatives and local government activities that advance the decentralization process and increase the control of local government by local constituents, thus decreasing the control of central authorities. DOI: 10.5901/mjss.2013.v4n10p34
Based on the Chinese provincial panel data from 1995 to 2008, using the panel co-integration method, this paper presents an empirical study on the long-term equilibrium relationship between the fiscal decentralization, the local government competition and the farmland conversion. On this basis, establishing the dynamic panel data model, using the generalized method of moments (GMM) to analyze the dynamic impact of the fiscal decentralization and the local government competition on the farmland conversion from the view of three cross-regional groups and the mainland China. The results show that there is a long-run co-integration relationship between the fiscal decentralization, the farmland conversion and the local government competition, and also there is a positive significant influence of the fiscal decentralization and the local government competition on the farmland conversion, a 1% increase in the degree of fiscal decentralization will increase the area of farmland conversion by 0.3280%. In addition, there is a significant difference of the incentive effect of local government competition on the farmland conversion in different regions. The paper ends with policy suggestions for perfecting the system of the fiscal decentralization, taxation and the division of responsibility and authority, reforming the criterion of the political achievement assessment, strengthening the management of land revenue, reducing the reliance of the local government on land finance; at the same time, the farmers' land property rights should be perfected.