The District Administration is the management of public affairs within a territory marked off for that purpose. Moreover, District Administration is that portion of public administration which functions within the territorial limits of a district. There are six approaches such as Fesler’s four approaches, the global approach and the Indian approach existing in the field of decentralization or district administration. The term “decentralization” implies not only the devolution of powers, but also a process in which responsibilities and duties are transferred by a higher or central authority to the institutions or organizations at the lower levels, thereby providing to the latter adequate incentive for autonomous functioning for the development of its particular local district people in India. There are many developmental benefits for the people because of the functioning of district administration in their respective local district level in India.
Decentralized finance [DeFi] uses a combination of existing block chain-related technologies — such as digital assets, wallets, smart contracts and auxiliary services including Oracles. Common services offered by DeFi platforms include payments, loans, trades, investments, insurance and asset management. Present research work discusses the benefits and challenges faced by decentralized finance. This also further explores the hierarchical inter-relationships amongst them using ISM methodology. It further discusses about Fiscal decentralization.
This paper examines the effect of intergovernmental fiscal transfers on the fiscal behaviour of local governments in Ethiopia for the period 2004-2018. The empirical findings suggest that central government grants bolster state-level employment and expenditure. However, grants from the central government to states do not crowd out state-level revenue collection. Hence, this paper argues that fiscal decentralisation in Ethiopia has mostly, at least in theory, taken the form of devolution of the power to tax and spend public money. However, on average state-level revenue can only finance up to 26 percent of their annual expenditure. As a result, fiscal federalism in Ethiopia appears to be a delegation of spending responsibilities. It must be considered in a decentralized tax system, but with a transfer scheme and political hierarchy. The results are robust to alternative econometric estimation techniques.
The often-forgotten dimension of public infrastructure finance is the difficulty of maintaining a proper level of infrastructure in good condition. Given that increasing responsibilities for public infrastructure investment have been decentralized worldwide, this study investigates the impact of fiscal and political decentralization on infrastructure maintenance expenditures using a panel cross-country analysis from 1995 to 2020. To address the endogeneity concerns and estimate the causal impact of fiscal decentralization (revenue and expenditure decentralization), this research uses the Geographic Fragmentation Index and country size as two valid instrumental variables for fiscal decentralization. Our main results confirm that fiscal and political decentralization measures are found to increase public spending on road maintenance. The findings are robust to alternative model specifications and different measures of fiscal and political decentralization.
The growth of state transfers to offset disparities in regional development affects the stability of the country’s financial system. This article delves into this outcome, empirically analyzing whether the transfer system for horizontal fiscal alignment leads to decreased financial system stability through increased borrowing at municipal and national levels. To test this hypothesis, we employ a quasi-experimental analysis strategy, examining potential scenarios of configuring transfers to Ukrainian municipalities for addressing horizontal fiscal imbalance. Across various transfer calculation scenarios involving changes in the calculation period, the number of budgets in consideration, and the alignment subject, we find that a suboptimal system of horizontal fiscal alignment, transferring funds from financially secure municipalities to insecure ones, leads to a rise in the public finance debt, subsequently decreasing financial system stability. Additionally, we discover that the current mechanism in Ukraine for horizontal fiscal alignment, designed to mitigate inequalities in socio-economic development among communities and regions, paradoxically exacerbates these disparities, artificially inflates indicators of decentralization reform success, and undermines public finance stability.
This paper examines the impact of government investment by the local government to stimulate the local economy and social security expenditure to protect the poor in the local economy. Unlike government expenditure by the central government, the local government expenditure may suffer from efficiency loss due to the absence of nationwide `planning' and `coordination.' This paper, using the Korean panel data, empirically show that the government investment to stimulate the local economy incurs efficiency loss due to `coordination failure,' while the social security expenditure does not. The result requires us a cautious and precise approach to 'decentralization of public finance unlike decentralization of political power.
Abstract This chapter focuses on the diversities within the Spanish State of Autonomies, shedding light on the asymmetrical nature of the devolution process, with an emphasis on the transformation of the constitutional framework concerning tax and finance power decentralization, juxtaposing Spanish Fiscal Federalism within the broader context of the European Union. An exploration of intergovernmental tax relations uncovers the limited efficacy of mixed commissions, leading to an assessment of the Spanish Constitutional Court's central role in mediating conflict. The analysis concludes by looking forward, speculating on the potential future trajectories of Spanish fiscal federalism.
The process of fiscal decentralization, as a typical feature of contemporary societies, implies the transfer of public functions and public revenues from higher to lower levels of authorities in order to ensure the financing of the transferred functions. The trend of fiscal decentralization has created the increased need for own revenues of local self-government units. The rates of these revenues are determined by local authorities, either independently or in line with the statutory limits. In the Republic of Serbia, own revenues of local self-government unit include different local public utility fees. In this paper, the authors deal with the financial autonomy of local self-government units observed through the lens of local public utility fees, (i.e. their yields), whereby the research will be limited only to the local self-government units in the territory of Autonomous Province of Vojvodina. The authors will also attempt to determine the factors that affect the rates and abundance of these revenues of local self-government units.
Fiscal decentralization is the transfer of responsibility between the provision of public services and sources of financing by the central government to lower levels of government, with the outcome depending on how the process itself is devised and implemented. Proper and balanced implementation of fiscal decentralization leads to economic growth, achieving economic goals that can bring economic benefits. In addition to economic benefits, decentralization could lead to greater accountability, transparency, and citizen engagement, which would also improve the level of democracy in society. Since 2002, the Republic of Croatia has secured a significant amount of financial resources through the system of tax revenue sharing and aid allocation, which has significantly improved the fiscal capacity of all local units. The impact of fiscal decentralization in the Republic of Croatia on economic growth was tested using a panel analysis. From the results obtained, there is a significant positive relationship between fiscal decentralization and economic activity, and based on the results obtained, it can be concluded that fiscal decentralization in the Republic of Croatia had a positive impact on economic growth. This also confirms the role of lower levels of government established to improve the quality of life of citizens by deciding on the provision of local public services close to where they are provided and close to the users, providing better education, social and health services and infrastructure, thus positively influencing economic growth. In further research, it is necessary to focus on the creation of a better system of financing lower levels of government and on the fiscal autonomy of local units in the Republic of Croatia, in order to make the impact of fiscal decentralization on economic growth even more evident and to have as much influence as possible on the even development of the Republic of Croatia.
Abstract Local democratization aims to improve the decentralized capacity of governance regimes to generate meaningful municipal spending geared towards realizing societal outcomes. In the late 1990s, following the Asian financial crisis, Indonesia initiated a significant institutional transition from centralistic and authoritarian rule towards decentralized and more democratic governance through the introduction of direct mayoral elections. Extant research analyzed the effects of the introduction of these elections on local public spending and local societal outcomes separately. This paper offers an integrated analysis of the impact of the introduction of direct mayoral elections on both local public spending and local societal outcomes in 456 Indonesian municipalities between 2002 and 2012. Analyses of growth models, using panel data on three domains (education, health, and infrastructure) provided by Indonesian Ministry of Finance, Indonesian Ministry of Home Affairs, and Statistics Indonesia, show that the introduction of direct mayoral elections in Indonesia resulted in an increased growth in educational expenditures. It also improved outcomes in health and infrastructure domains. However, the introduction of direct mayoral elections reversed a positive association between public spending and the attainment of societal outcomes or worsened a negative association between them. These results would support a view on local democratization in Indonesia asserting that the introduction of direct mayoral elections stimulated local clientelist practices rather than local accountability and policy responsiveness.
Fiscal decentralization has recently gained popularity throughout the world. This study examines how revenue decentralization influences subnational budgetary balances and how it affects the general government debt in the OECD countries. We applied panel regression analysis to an annual panel dataset that includes data from 23 countries from 1990 to 2020. Then, we explore the relationship between fiscal/revenue autonomy and public finance debt thus budgetary balances at the SNG level. Our empirical findings suggest that higher levels of SNG budget discipline are associated with greater revenue autonomy. The findings also suggest that general governments should consider delegating greater fiscal autonomy to SNGs to achieve better fiscal outcomes, including lower levels of general government public debt. This information could be useful for policymakers who are looking to implement sustainable fiscal stewardship.
Tatiana N. Litvinova, Olga А. Kochetkova, D. V. Kaverin
Introduction. The article analyses the features of the socio-economic development of the republics of the North Caucasian Federal District in the conditions of external challenges that our country has been facing over the past three years, including the consequences of the COVID-19 pandemic, as well as external sanctions pressure in 2022. The relevance of the study is due to the constant dependence of the budgets of the republics of the North Caucasian Federal District on revenues from the federal budget, tension in the labor market, and the need to improve the mechanisms of regional governance.Materials and methods. The concept of economic (budgetary federalism) developed by J. Stigler, W. Oates, L. Feld and F. Schneider serves as the theoretical and methodological basis of the study. Foreign theories of economic federalism offer two models of the budget process – decentralized and centralized. The Russian model of budgetary federalism, functioning as a centralized unitary state, was considered in the works of A. Avetisyan, I. Kharitonov, E. Mashchenko and many others. On the one hand, such a system makes it possible to accumulate federal budget funds for solving common problems. On the other hand, there are still regions with a strong economic dependence on gratuitous receipts from the budget of a higher level. This study is based on the analysis of socio-economic statistics and monitoring of regional media.Results. The Republics of the North Caucasian Federal District continue to demonstrate a high subsidized dependence of their budgets on gratuitous receipts from the federal budget. At the same time, in the post-pandemic period, there has been a slight growth in own budget revenues due to an increase of small and medium-sized businesses. Unemployment remains a serious systemic problem. The digitalization and the development of e-government play an important role in the optimization of management processes. During the pandemic, the number of citizens of the North Caucasian Federal District receiving public services in electronic form increased by 12%. The sanctions pressure after the start of the Special Military Operation in Ukraine did not have a significant impact on the economy of the republics of the North Caucasian Federal District due to their weak involvement in the international division of labor.Discussion and conclusion. The serious dependence of the budgets of the republics of the North Caucasian Federal District on subsidies from the federal center, on the one hand, makes the socio-economic situation in the republics free from external challenges. On the other hand, the entire burden of economic support and financing of the necessary social measures falls on the federal government, in particular, smoothing out inflationary risks for small businesses and families with children. The difference in the possibilities of regional budgets was also manifested in the provision of one-time financial assistance to the families of the mobilized. This again raises the need to increase the revenue side of regional budgets, due to the growth in the number of taxpaying enterprises.
Rafał Trzeciakowski, Piotr Ciżkowicz, Andrzej Rzońca
This dataset covers 2476-2479 Polish municipalities and cities (dependent on the year) over a period from 2004 when Poland joined the EU to the pre-COVID-19-pandemic 2019. The created 113 yearly panel variables include budgetary, electoral competitiveness, and European Union funded investment drive data. While the dataset has been created out of publicly available sources, their use requires advanced knowledge of budgetary data and their classification, as well as data gathering, merging, and clearing, which required many hours of work over a year. Fiscal variables were created out of raw data of over 25 million subcentral governments records. They were sourced from Rb27s (revenue), Rb28s (expenditure), RbNDS (balance), and RbZtd (debt) forms, which are reported quarterly by all subcentral governments to the Ministry of Finance. These data were aggregated according to the governmental budgetary classification keys into ready-to-use variables. Furthermore, these data were used to create original EU-financed local investment drives proxy variables based on large investments in general and in sports objects in particular. Moreover, subcentral electoral data from 2002, 2006, 2010, 2014, and 2018 were sourced from the National Electoral Commission, mapped, cleared, merged, and used to create original electoral competitiveness variables. This dataset can be used to model different aspects of fiscal decentralization, political budget cycles, and EU-funded investment in a large sample of local government units.
Michalis Avgerinos Loutsaris, Maria Ioanna Maratsi, Zoi Lachana, Mohsan Ali
Eight basic principles are described in the literature (Höchtl and Reichstädter, 2011; Solar et al., 2013), which should meet government data in order to be considered open. These are: (1) Complete; (2) Primary; (3) Timely; (4) Accessible; (5) Machine processable; (6) Non-discriminatory; (7) Non-proprietary; (8) License-free. In parallel, Government data may contain multiple sets of data, including transactions in any form (e.g. financial or not) and expenditure, population, census, parliamentary proceedings, etc. According to Ubaldi (2013) public data sets included in open government data initiatives include:<br> 1.business information (including chamber of commerce information, etc.)<br> 2.registries, patent and trademark information and public databases<br> 3.geographic information (such as address information, aerial photographs, buildings, geology, and topographic information)<br> 4.legal information (such as national, and international court decisions, national laws)<br> 5.meteorological information (including data and models for climate and weather forecasts)<br> 6.social data (such as statistics on the economy, employment, health, population etc.).<br> 7.Transport information (such as traffic congestion, public transport and vehicle classification);<br> At the same time, the characteristics of NFTs (as it is mentioned above) along with their usage advantages (ownership, authenticity, transferability, creation of economic opportunity, and boosting inclusive growth), constitute them as an innovative solution for governments. The adoption of NFTs solutions by the public sector will not only provide many new capabilities and better services but will establish a safest, openly accessible, transparent and eco-friendly transactional environment. In addition the most important disadvantage of the NFTs usage which is the Concerns Regarding Ecological Impact, seems that fades due to the Proof-of-Stake consensus mechanisms which is proven to be energy efficiency.
Rafael Berriel, Eugenia Gonzalez-Aguado, Patrick J. Kehoe, Elena Pastorino
We apply ideas from fiscal federalism to reassess how fiscal authority should be delegated within a monetary union.In a real-economy model with no fiscal externalities, in which local fiscal authorities have an informational advantage about the preferences of their citizens for public spending relative to a fiscal union, a natural generalization of the classic decentralization result by Oates (1972) applies.Namely, a decentralized fiscal regime dominates a fiscal union, and the degree of dominance increases as the information of the fiscal union worsens in quality.In the presence of direct fiscal externalities across countries, however, a decentralized regime is optimal for small federations of countries, whereas a centralized regime is optimal for large ones.We then consider a monetary-economy model, in which governments finance their expenditures with nominal debt and inflation has a negative impact on aggregate productivity.If the monetary authority can commit to an inflation policy, then a version of Oates (1972)'s decentralization result holds.By contrast, when the monetary authority lacks commitment power, the resulting time-inconsistency problem generates an indirect endogenous fiscal externality.In this case, when a country-level fiscal authority chooses a higher level of nominal debt, it induces the monetary authority to inflate more to reduce the level of distortionary taxes needed to finance the higher debt.Because country-level fiscal authorities do not take into account the costs to other countries of the inflation that their fiscal policies induce, a negative fiscal externality arises.This externality naturally becomes more severe as the number of countries in the monetary union increases.Hence, as in the real-economy model, a decentralized fiscal regime is optimal for small monetary unions, whereas a fiscal union is optimal for sufficiently large ones.Our key result is that as the size of a monetary union increases, it becomes relatively more desirable to centralize fiscal authority.We conclude by discussing the implications of our results for the debate on the integration of fiscal policy within the EU and its enlargement.
This paper investigates the socioeconomic impact of fiscal decentralization in Pakistan. The time-series sample during 1982-2018 is divided between pre and post-periods of the 7th National Finance Commission (NFC) Award of 2009. The socioeconomic impacts were separated into growth, education, and health. Results found that there is a positive long-run relationship across the variables. At the same time, the total effect from composite decentralization has positively impacted economic growth and education but none to the health sector after the 7th NFC award. The outcomes have been elaborated with socioeconomic analysis. The study also provides policy recommendations based on empirical outcomes.
Local government is one of the most important pillars of good governance of a society, an important indicator to express the essential role it has in the sustainable development (SD) of a country. The reforms undertaken in Albania in terms of increasing the fiscal and functional capacity of local government, connect it more and more with all components of SD. The use and maximization of the capacities of the local government in order to improve the basic goals of SD, is supported not only by the theoretical connection of functions but also by the experience of developed countries with a deep decentralization. In Albania, the local government receives revenues in the form of central government transfers and its own. These revenues are used by the local government to finance public services that have a direct impact on the lives of citizens but also to improve the quality of life. Both forms of local government revenue are at full discretion to be used by local selfgovernment units and to improve measurable indicators of increasing the quality of public services and financing sustainable development.
Cenay Babaoğlu, Lucie Sobotková, Martin Sobotka, Murat Altuğ Köktaş · 5 authors
Abstract The article deals with the issue of fiscal decentralization in relation to compliance with fiscal discipline at the municipal level. The article evaluates the situation of selected Czech and Turkish cities. In the case of Czech cities, so-called statutory cities were selected, which, due to their size and budget, have a certain independence from the central government. In the case of Turkish cities, the largest ones were analyzed, which also have a high degree of autonomy due to their size. The unifying element of both samples is approximately similar financing conditions. In both cases, shared taxes are used, but they are in the hands of the central government, and the municipalities have no possibility to influence them. In the case of municipalities, they can receive subsidies from the central government. From the perspective of fiscal responsibility management, relations with the central government appear to be a stabilizing element. However, at the same time, strengthening revenues associated with local government could also support fiscal discipline. In particular, this possibility would be significant in the case of smaller municipalities when the share of local income in total income is increasing. Another option for discussion is the availability of debt financial instruments. In the case of Turkish cities, fiscal discipline is significantly correlated with external debt. Although Czech municipalities can easily access debt financial instruments, they cannot use foreign financing. JEL Classification: C33, C35, H71, H72, H77
Abstract The article analyzes the specifics of the COVID-19 crisis and its impact on the public finance system, taking into account the key problems of the theory of fiscal federalism. The purpose of this article is to examine the impact of the pandemic crisis on the fiscal relations taking place between different levels of public authority ( intergovernmental relations – IGR ), considered in the context of the decentralization of the public finance system and the associated distribution of public functions and resources. The article refers to the model features of these relationships, as defined in the theory of fiscal federalism. It also examined the responses of European countries to the negative effects of the COVID-19 crisis, taken within the framework of the IGR, in order to limit the negative effects of the pandemic at different stages. An attempt was also made to answer the question of how the current pandemic crisis may change the multilevel governance (MLG) patterns set forth in the doctrine. The Polish public finance system was used as an example for detailed analysis in this regard.
Financing regional government involves trade-offs between own-source taxes and grants. Improved accountability has been an argument behind calls for greater tax devolution, but this argument relies upon effective scrutiny mechanisms existing or being developed. This paper explores such issues through the lens of recent tax devolution to Scotland. Drawing on insights from senior stakeholders, we assess how scrutiny has changed in the aftermath of new powers. We conclude that, despite some improvements, progress has been limited. We develop an analytical framework to understand why, drawing out lessons for improving accountability with fiscal decentralization.