The paper presents the current state of the process of agencification in Croatia, pointing out both the process and the institutional design. The agency model in Croatia consists of several types of more or less autonomous administrative organizations, situated at different distances from the central government. The most evident pressures for agencification come from decentralization, managerial responses and Europeanization. The reversal of the process in recent years has mostly happened because of the need for rationalization of the public administration system, which is also under pressure because of the economic crisis. The key problems of the agency model are over politicization on the one hand, and insufficient and inadequate control on the other. The adequate legal framework for agencies would enhance institutionalization of the agency model, ensuring effectiveness and legal certainty and maintaining a sufficient level of independence.
Published as: Jorge Martinez and Paul Smoke. Introduction in <em>Local Government Finance: The Challenges of the 21st Century. </em>United Cities and Local Governments' Second Global Report on Decentralization and Local Democracy, Barcelona 2010.Edward Elgar, 2011. (c) United Cities and Local Governments. Published by <a href="http://www.e-elgar.co.uk/">Edward Elgar</a>. Posted with the permission of the publisher for personal use only.
Claudia Dziobek, Miguel Alves, Majdeline El Rayess, Carlos Alberto Gutierrez Mangas · 5 authors
A useful but little known feature of the IMF’s Government Finance Statistics Yearbook (GFSY) is the information on the structure of governments. Institutional tables, included in the GFSY, provide detail on the central, state, and local levels of governments, social security, and extrabudgetary units. We refer to the main levels of government as GL1, GL2, and GL3 in ascending order of institutional coverage. We present maps of the various levels of government for 74 countries to illustrate the usefulness of this database and make it more accessible to users. The maps provide information about how centralized or decentralized government finances and employment are and their size relative to the overall economy. Government map data facilitate the monitoring of fiscal policy and fiscal rules.
The Croatian “decentralization package” from mid-2001 has shown how multiple pressures for shifting power to the local level may actually result in relative failure. The central government has ceded the control in particular policy sectors by shifting responsibilities for certain educational, welfare and health services to the counties and municipalities. However, the decentralization initiative was excessively marked as very limited and strongly labeled by the vertical policy dimension, expressing the dominance of top-down incentives of the central government in comparison to bottom-up initiatives stemming from the local government units. The 2001 decentralized package did not substantially increase the portion of local governments finance in total public finance, showing a failure to provide local government units with stronger fiscal capacity. The central government bodies also did not take into account the alternative proposals made by various policy actors ranging from academic institutions, researchers in NGOs, and associations of local government organizations. All these things have contributed to a relatively negligible influence of the horizontal policy dimension on the decentralization outcome. The whole process can therefore be described as centrally controlled decentralization, or decentralization from above.
We contribute to the literature on the political determinants of regional financing by analyzing the case of Spain, a largely decentralized country. Using a dynamic panel data model, we argue that the rise in relative bargaining power of regional parties in Spain can partly explain the increase in budgetary allocations to regions observed during the period 1986 – 2006. In particular, our results show that the rise in parliamentary representation of the nationalist Catalonian party, measured by the Banzhaf voting power index, has been a significant factor in ensuring increasing financial resources to regional governments. In addition, the traditional hypotheses of the political economy literature on legislative apportionment are tested for the case of Spain, with no significant results observed. The overall distribution of regional financing in Spain seems to be in general well aligned with the basic economic principles of efficiency and equity recommended for such a system.
One of the fundamental tenets of fiscal federalism is that, absent various sorts of externalities, decentralized governments that rely on own-source revenues should be more fiscally efficient than decentralized governments that rely on grant financing. The argument relies in part on the idea that sub-national governments, being closer to the people, are more accountable to its citizens. Accountability to citizens is also important in understanding the presence of corruption in government. This suggests that the financial structure and institutions of decentralized governments can potentially influence the degree and extent of corrupt activity. Financial structures that make governments more accountable should be associated with less corruption (other things equal), while financial structures with less accountability should be associated with more corrupt activities. We develop a simple model in which the use of grants rather than locally raised taxes increases corruption. We then use a panel data set of Mexican states to study the relationship between funding sources for Mexican states and the level of corruption in those states. We find that greater use of own tax revenues lowers corruption while greater use of grants increases corruption. This suggests that expenditure decentralization that is accompanied by revenue decentralization is likely to discourage corruption while expenditure decentralization that is funded by grants tends to encourage corruption. We also find that poverty, a measure of uninformed citizens, leads to greater corruption.
Bernard Bashaasha, Margaret Najjingo Mangheni, Ephraim Nkonya
Uganda introduced the decentralization policy in 1997 under the Local Government Act of 1997 that has since undergone four amendments. The policy inherently decentralized service delivery institutions and their governance in order to improve access to services for the rural poor. Based on an analysis of available literature, the paper documents the state of knowledge regarding rural service provision in Uganda under decentralization and identifies knowledge gaps for further investigation. Its focus is on education, health, and agricultural advisory services, as well as the management of natural resources in Uganda. Although enlightening, a review of the broader decentralization literature is beyond the scope of this work. The analysis revealed that results in terms of attaining the objectives of decentralization are mixed. While as anticipated generally decentralization resulted in greater participation and control over service delivery and governance by local communities, local governments are still grappling with a range of challenges, namely, inadequate local financial resources and over-reliance on conditional central government grants; inability to attract and retain sufficient trained and experienced staff; corruption, nepotism, and elite capture. With regard to the specific services, while universal primary education (UPE) policy under the decentralization framework is credited with a dramatic increase in primary school enrollment, public primary education services are still dogged by concerns over financing, equity, quality, and the need for curriculum reform. Some studies show that there has been no improvement in health services with many health status indicators either stagnating or worsening. In general, decentralization of education and health services has not resulted in greater participation of the ordinary people and accountability of service providers to the community. Regarding agricultural extension and advisory services, except for areas serviced by NGOs, the majority of the country does not readily access extension services, because districts have been unable to prioritize the operational expenses. However, there is some evidence that the devolution of responsibility for natural resource management (NRM) has contributed to greater compliance with some NRM requirements in some areas while in other areas forest conditions have declined following decentralization. Generally, evidence on whether decentralization has improved service delivery in Uganda is still inconclusive, and more research is needed.
Claudia Dziobek, Carlos Alberto Gutierrez Mangas, Phebby Kufa
Conventional wisdom postulates that there are benefits from decentralizing government finances but there is little empirical evidence about actual country practices. This paper presents data on fiscal decentralization for about 80 countries over a period of about 20 years (1990 - 2008) from the IMF’s Government Finance Statistics Yearbook (GFSY), the only global database with fiscal data for several levels of government. The data show that in many countries, revenue collection remains relatively more centralized than expenditures and that employment tends to be concentrated in lower levels of government. Except for transition economies, the levels of decentralization are relatively stable over the time period. The findings are shown by degree of economic development, constitutional power arrangements, and geographic area, broadly confirming key factors identified in the literature as determining the extent of fiscal decentralization.
This article contributes to the limited empirical literature on the impact of decentralization on economic welfare by investigating the hypothesis that shifts towards more fiscal decentralization in health services would be accompanied by improvements in population health. Building on a conventional public finance model applied to health care, this hypothesis is tested on a panel data of the highly decentralized Canadian provinces during the period 1979 to 1995. The results of the exploratory empirical analysis presented in this article suggest that fiscal decentralization of health services in Canada has had a positive and substantial influence on the effectiveness of public policy in improving a population's health over the period studied.
The research theme is important for the local economy and financial literature on local public finance. It is known that the tax base of the territories is quite uneven and providing quality public services is impossible based on their own sources. The support for less developed local public administration from the financial point of view requires fiscal decentralization and involves financial equalization procedures or other similar measures aimed at eliminating the effect of unequal distribution for potential funding sources. Financial equalization is a group of financial actions made in order to overcome economic and fiscal disparities between territories. The purpose of financial equalization is the additional funding of less developed territories in order to reduce regional disparities. Key words: financial equalization, fiscal decentralization, inter-budgetary
This paper intends to study the promotion of fiscal decentralization and the ”trinity reform package”, which are important local finance reforms in modern Japan. Firstly, it introduces the financial relations between the central and local governments. Secondly, it analyzes the process of fiscal decentralization since the 1990s. Thirdly, it examines the effects and defects of the ”trinity reform package.” Finally, it describes the financial conditions in current Japan.
Man-made self-organizing systems date back to antiquity; for example, elaborate water clocks found from Alexandria (Ctesibius's clepsydra) to Seoul (King Sejong's Chagyongnu) were designed to keep constant rates or strike at regular time intervals without human adjustment. More modern examples include Watt's centrifugal governor, Black's negative feedback amplifier, and Nyquist's stability test, which enabled engineered systems to stabilize themselves. These and numerous innovations in control theory and engineering optimization have contributed much to modern communications technology. But there is a need for advances in both methods and applications beyond what has been achieved in the precise settings of mechanical, electronic, and optical switching and transmission towards the self-management and control of large-scale systems with many interacting and semi-autonomous components. Natural phenomena may be a guide for us, a model for self-organized decentralized systems. Spontaneous magnetization, crystallization, lasers, and superconductivity are examples of structural self-organization in physics where cohesive behavior emerges from initial disorder. In self-assembly and auto-catalytic networks in chemistry, molecules organize themselves in well-ordered arrangements without external action, and in biology, we observe highly complex coordinated action as in the folding of proteins, homeostasis, and flocking.
Abstract When external effects are important, markets will be inefficient, and economists have considered several broad classes of economic instruments to correct these inefficiencies. However, the standard economic analysis has tended to take the region, and the government, as a given; that is, this work has neglected important distinctions and interactions between the geographic scope of different pollutants, the enforcement authority of various levels of government, and the fiscal responsibilities of the various levels of government. It typically ignores the possibility that the externality may be created and addressed by local governments, and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems. This paper examines the implications of decentralization for the design of corrective policies; that is, how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services and to choose tax instruments that can both finance these expenditures and correct the market failures of externalities?
By autonomy, most of resources that managed by central government becomes managed by local government. By decentralization, services to the society will be more efficient and effectively. This paper will analyze how far the response of local income because of change in Gross Regional Domestic Product (GRDP,) and also the ability of regional finance in regional autonomy era. The result of this paper shows that the coefficient of elasticity of regional income more than one, it means that if Gross Regional Domestic Product (GRDP) increase one percent, it will increases local income more than one percent. The role of domestic income to local income decrease, it means that the local government has to look for a forward alternative how lo increases the role of domestic income to local income.
As it is provided in the 1999 Constitution, federalism in Venezuela is a contradictory form of government. Typically, a federation is a politically decentralized state organization based on the existence and functioning of autonomous states. The power of that decentralized state is distributed among the national state and the member states. In contrast, the federation in Venezuela is a centralized federation, which is a contradiction in itself. Unfortunately, Venezuela is not a good example of the importance of federalism in Latin America because it is a federation based on a very centralized national government, with twenty-three formal autonomous states and one capital district. Each of these twenty-three formal autonomous states is without its own effective public policies and its own substantive subnational constitutions; and if it is true that they have elected authorities, those have been weakened by the central government. Regarding the capital district, against the provisions of the 1999 Constitution, it has been regulated in 2009 by a national law with the same trends as the former federal district; that is, without self-government, dependent of the national executive. But the federation in the country's history has not always been like it is now. The centralization of the federation occurred progressively during the twentieth century and has been particularly accentuated during the past decade. Centralization began with the installment of the authoritarian government of the dictator Juan Vicente Gómez, who ruled for approximately three decades in the first half of the twentieth century. During those years, no democratic institutions were developed.
China has been carrying out a significant fiscal decentralization policy for over three decades. However, reforms have largely concentrated on the revenue side of budgets, and generally they have not been coordinated with an explicit strategy for the decentralization of expenditure assignments. Although significant strides have been made in the areas of tax assignments and tax administration, other areas—in particular, the assignment of government functions—have advanced much less. Yet a stable, efficient, and fair decentralized system of public finance in China will require an unambiguous and well-defined institutional framework in the assignment of expenditure responsibilities among the different levels of government. The assignment of responsibilities is by no means the only condition, but it is the most important, and it should also be the first in a well-sequenced decentralization reform effort. This chapter reviews the most important current issues surrounding the assignment of expenditure responsibilities in China. In order to put those issues in the proper perspective, an overview is provided of the general principles of expenditure assignments and the common problems encountered in the international experience. The chapter also provides a road map and practical recommendations for the reform of expenditure assignments in China.
Based on statistics data from 1987 to 2007 in China, this paper, using spatial panel data model, has conducted an empirical study of the influence factors on finance competition of local governments to foreign direct investment (FDI) inflows. The results show that tax competition and expense competition, two widely-used finance competition tools for absorbing FDI, have different promotion to FDI inflows. Expense competition is significantly positive correlated to FDI inflows, but tax competition is not significant. Furthermore, competition tool selection is correlate with time span and economic development level in China. On the one hand, judging from the time aspect, on a nation wide scale, the use of competition tools have changed from tax competition to expense competition since the 1994 fiscal decentralization reform in view of FDI inflows competition. On the other hand, judging from the regional aspect, the developed regions tend to use expense competition tool, while the underdeveloped ones remain preferential tax policy for absorbing FDI.
CART19 therapy has revolutionized the treatment of CD19<sup>+</sup> acute lymphoblastic leukemia, demonstrating an unprecedented complete remission rate; however, as follow-up prolongs, a high relapse rate after CART19 therapy has emerged as one of the major problems. Relapse can be attributed to the loss of leukemic cell immunogenicity, diminished function and amount of CART19 cells, and the inhibitory bone marrow microenvironment. Although studies to prevent and treat relapse have begun, some encouraging results have demonstrated the possibility of decreasing the relapse rate. In this review, we focus on the possible mechanisms behind relapse. We will summarize and propose strategies to prevent and manage relapse on the basis of these potential mechanisms.
A recent trend in decentralization in \n several large and diverse countries is the creation of local \n jurisdictions below the regional level -- municipalities, \n towns, and villages -- whose spending is almost exclusively \n financed by grants from both regional and national \n governments. This paper argues that such grants-financed \n decentralization enables politicians to target benefits to \n pivotal voters and organized interest groups in exchange for \n political support. Decentralization, in this model, is \n subject to political capture, facilitating vote-buying, \n patronage, or pork-barrel projects, at the expense of \n effective provision of broad public goods. There is \n anecdotal evidence on local politics in several large \n countries that is consistent with this theory. The paper \n explores its implications for international development \n programs in support of decentralization.
From 1979 to 1983, a new intermediate level of government was created in Spain. This article focuses on the financial aspects of political decentralization in Spain. How much power to tax do the new regional parliaments and executives enjoy? What other sources of income do they dispose of? Which rules have been settled for regulating their tax and non-tax sources of income? Has fiscal decentralization affected fiscal discipline? Are these governments now financially autonomous? These are the questions addressed. The article shows that, with the exception of the Basque Country and Navarre, regional governments were financed mainly through intergovernmental grants during the 1980s and 1990s. However, as a result of several recent reforms, their power to tax as well as their financial autonomy has increased substantially since the mid-1990s, mainly through their participation by law in the revenues of several central taxes (known as ceded taxes) upon which they also enjoy significant regulatory rights. As the ceded taxes mechanism is not a simple revenue-sharing formula in Spain, the article concludes that the Spanish model departs from both the more uniform and top-down German model and the more heterogeneous and competitive one characterizing the taxing rights of the States in US federalism.