The author reviews the conceptual basis for fiscal equalization transfers, analyzes the theoretical implications for optimal design of equalization transfers, and suggests quantitative approaches for assessing the fiscal needs of subnational governments and determining their entitlement to transfers. The author illustrates proposed methods using data for local and provincial Canadian governments. The proposed methods could be useful tools, he says, for undertaking systematic objective reviews of aggregate and sectoral public spending in developing countries. The author argues that in a decentralized federation, fiscal inefficiencies and inequities arise because of subnational governments'differing levels of ability to provide comparable public services at comparable tax rates. Fiscal equalization transfers that reduce or eliminate differentials in net fiscal benefits create a rare instance in economics when considerations of equity and efficiency coincide. These transfers must allow for differences in the spending needs and revenues-raising abilities of the various subnational governments. The author argues for a two-tiered approach to equalization. The first tier would be a federal responsibility to equalize the burden of federal taxes. The second tier would be an interprovincial equalization fund to be administered by the Council of Provincial Finance Ministers. It would entail a comprehensive equalization system that takes into account provincial spending needs. The standard of equalization would be negotiated.
This chapter examines the financial history of the university during the period from 1914 to 1970. Early on in the 20th century the Board of Finance sought central control over departmental funds, but this proposal was rejected in March 1915 and the university remained highly decentralized. In 1917, the Board of Finance made another attempt to centralize college finances and failed again. In terms of finances, the university's income was little more than a third of that of the colleges collectively and it did not overtake this until the early 1950s. This chapter provides statistics relevant to the income of the Oxford colleges and the expenditure per students from the 1660s to 1988.
A bstract . The French health care delivery system is characterized, on the one hand, by a centralized and socialized decision making process as far as financing is concerned, yet on the other hand, the regulation of activities is highly decentralized and governed mainly by individual physicians on a private basis. Today, the health care scene seems to be stuck in a process within which each new reform leads to yet another reform, In this movement, the role played by academic health economists is increasing. The French health care delivery system and its dynamics are described and two major topics which wilt be at stake in the years to come, the remuneration of physicians and the financing of hospitals are considered. The challenge facing health economists who have to consider the system as a system, is examined. The relationships between the political arena and the researcher's ivory tower appears to be is one of the keys for the future of the health care system. It is demonstrated that, in this area too, few barriers have fallen.
Latin America's Emerging Local Politics Jonathan Fox (bio) Does local democratization really matter for national politics? For those who value accountable government and civic participation, democracy at the local level is obviously important in and of itself. This essay makes a different point, howeverâthat the degree of democratization of local government affects the prospects for national democratic governance. Most Latin American nations made the delicate transition from authoritarian to elected civilian regimes in the 1980s, but in the 1990s many still have not firmly consolidated their democratic gains. The wave of regime transitions in the 1980s created opportunities for experimentation with more honest and effective styles of governance, but so far most of the new regimes have failed to produce successful results at the national level. Traditional centralized, top-down approaches dominated national governance thoughout the region during the 1980s. Key characteristics included centralized and militarized police powers, appointed rather than elected mayors and governors, and extreme fiscal and bureaucratic centralization. These problems of top-down governance were compounded by systemic defects such as the lack of independent judicial authority and highly opaque, discretionary policy processes. Remarkably, most of these practices could be found across the entire political spectrum, from the moderate civilian governments of Brazil, Mexico, Peru, Venezuela, and Colombia to revolutionary Nicaragua and Cuba on the left and military-dominated El Salvador, Guatemala, and pre-1989 Chile on the right. The view that policy solutions should necessarily be national is now [End Page 105] widely questioned throughout Latin America. The role of national governments is changing in two ways: international economic integration is limiting the scope for market regulation, while on the domestic front national authorities have begun to devolve major responsibilities to local governments. For example, Brazil, Chile, Mexico, Peru, Venezuela, Nicaragua, and Colombia all began decentralization programs in the 1980s. Many of these decentralization plans were enshrined in new or recently reformed constitutions, though the actual resources and autonomy ceded to local authorities varied greatly.1 Decentralization does not necessarily involve the democratization of local government, however. In Chile, for example, General Augusto Pinochet's military dictatorship gave huge policy responsibilities to appointed mayors. Local democratization has two dimensions. First, it involves opening up territorially based subnational governments to electoral competition (mayors and governors had traditionally been chosen by the president in many Latin American countries). Second, it entails the elimination of exclusionary political practices, including fraud, unfair limits on voter registration, the lack of ballot secrecy, voter intimidation, and vote buying. These are issues of electoral freedoms, as distinct from issues of electoral fairness (e.g., media access, campaign financing, etc.). This essay focuses on exclusionary political practices in "local" politics because that is where most citizens either gain access to or find themselves excluded from the state more generally. But authoritarian local politiciansâespecially those challenged from belowâusually need national allies to survive. Local democratization affects the prospects for national democratic governance in four interrelated respects. First, elected civilian regimes cannot be considered democratic until authoritarian enclaves are eliminated and the entire citizenry is effectively enfranchised. Second, pluralist politics must be learned, and subnational governments make a good school. Third, rising democratic leaders can most credibly challenge the corrupt old ways if they are forearmed with successful records in local government. Fourth, the widespread transition from traditionally paternalistic social policies to more efficient and targeted programs depends on balanced partnerships among national governments, local governments, and new social and civic actors. Eliminating Authoritarian Enclaves National political conditions certainly shape the possibilities for local democratization, but the reverse is true as well. If enough authoritarian enclaves persist, democracy's consolidation at the national level may be jeopardized. Longstanding exclusionary practices will not disappear because of the signing of decrees or the transfer of the presidential sash in national capitals. [End Page 106] The persistence of authoritarian enclaves under civilian rule prevents the effective extension of basic political rights to the entire population. The proliferation of seemingly small free spaces within civil society greatly helped to weaken centralized authoritarian rule in many a Latin American dictatorship. Now one encounters a mirror image of that situationâelected civilian regimes rule nationally, but the societies...
Politics and Society in Latin America
Political Conflict and Governance
Political and Social Dynamics in Chile and Latin America
Analysis of sports-related demands of potential users of an organization is a very important aspect of its functioning and helps it cover its demands and needs. In the context of sports, analysis of demands related to planning and provision for sports areas is important for various social agents and is a relevant contribution of psychology towards development and improvement of sports management. This article presents the results of a survey from 625 users of 43 facilities in the Spanish Autonomous Community of Valencia. The survey was centred on their demands respecting provision for sports facilites. Three main aspects were considered: values and function of the practice of sport for respondents, users' preferences for the type of facility that should be used, and certain preferences and opinions about facilities' management and ownership. Outstanding results are: great centrality of sport for respondents, predominant orientation towards sport as a means of leisure and recreation, a preference for state-owned facilities, even though respondents believe private ones are better managed, consideration of in-door pavilions and covered sports centres as facilities that should get priority in local building plans, and a preference for decentralization of new facilities. This analysis can be of great help in order to plan the provision for new sports services and infrastructure, and a supporting tool in the management of facilities.
Oded Hochman, David Pines, JacquesâFrançois Thisse
The authors show that space matters in designing the optimal provision of local public goods. Geography imposes a particular institutional structure of local governments due to the overlapping of market areas associated with different local public goods. The optimum can be decentralized through local governments that have jurisdiction over market areas of all local public good types. This implies that the appropriate suppliers of local public goods are metropolitan governments which finance them through user charges and land rent. In addition, the authors' approach invalidates the prevailing theory of fiscal federalism, according to which a layer of government should be established for each type of local public good. Copyright 1995 by American Economic Association.
The author examines the many faces of infrastructure decentralization: the costs and benefits, the government structure (constraint or variable?), the"polycentric"approach, and how to make decentralization work (for whom?). He proposes basic principles and guidelines for policy design, for both small projects and large. Broadly, these guidelines are summed up in a few propositions. In all countries, some critical infrastructure is provided through a decentralized political structure. Current trends make that likely to be more true in the future. Decentralization, however defined, in and of itself had no necessary implications for good or evil so far as infrastructure is concerned: its effects depend on the incentives various decisionmakers face. The key to ensuring that these incentives are conducive to"good"decisions (about design, siting, timing, finance, pricing, operation, maintenance, and use of infrastructure) is to ensure that those who made the decisions bear the financial (and political) consequences, as much as possible. Politically, this means that political leaders at all levels should be responsive and responsible to their constituents, and that those constituents are fully informed about the consequences of all decisions. Making politicians bear the consequences of their own mistakes is as close as one can get to a"hard"political budget constraint. Economically, it must be difficult for local residents to shift cost to nonresidents who do not receive benefits and to make local decisionmakers fully responsible to their citizens for the use they make of revenues collected from them (through local taxes), to users of infrastructure (local or otherwise) for the use made of the revenues they contribute (through user charges of various sorts), and to taxpayers in general for the use made of any transfers (or subsidized loans) they receive. Administratively, what such a system requires is a clear set of"framework"laws (on local budgeting, financial reporting, taxation, contracting, dispute settlement, rules to be followed in designing user charges and so on), as well as adequate institutional support for localities to operate in this environment. To the extent that these conditions are not met, the perverse incentives that too often exist because of the structure and finance of the public sector in many countries will probably be exacerbated by the current tendency to decentralize more and more decisions in the public sector.
The World Bank has announced a dramatic shift in water policy that will nearly quadruple its spending in this area while it shifts the emphasis toward sustainable development. Instead of financing project-oriented investments in irrigation, water supply, sanitation and hydropower, the Bank will lend for environmentally sustainable, river-basin-wide water resource management. Privatization and decentralization are other aspects of the new policy. The implications of water policy are particularly important in the Middle East, where in the long run peace may depend on the way in which available water is allocated; proposed projects in the region are discussed, as is the need for improved data on surface and groundwater.
In the past decade, there is an emerging trend for the use of game theoretical framework in studying government tax plicies. The game theoretical approach allows the possibility of simultaneous interactions between government policy and decentralized private decisions. This paper develops a stochastic differential game between the government and the public. The public chooses an investment strategy to maximize the present value of income net of tax and investment expenditures. The government controls the tax system and aims at maximizing a weighted sum of tax collected, the level of bonds outstanding and income net of investment expenditures. Two dynamic processes â one for the capital formation and the other for bonds accumulation â are present in the model. The dynamic processes are subject to stochastic shocks. A feedback Nash equilibrium solution of the game is obtained. The parabolic partial differential equations characterizing the value functions of the game equilibrium is solved explicitly. Closed-from solutions of the equilibrium investment strategy and tax policy are provided. The stationary (longrun equilibrium) joint density function of capital stock and bonds is also obtained. 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 government of Cameroon like that of many Sub-S aharan African countries is \nfaced with dwindling revenues and cannot provide the required fmances for the education \nsector. Since many other developing countries are facing similar fmancial constraints, \npolicy options have been proposed for the recovery of costs as a way of revitalizing and \nimproving the quality of education in these countries. The introduction of user charges is \none of the more prominent options that applies to all levels of education. In light of the \neducational financing situation in Cameroon, this study sets out to assess the possibility \nof implementing this option. It therefore seeks to analyze how secondary schools are \nfmanced and to measure private direct costs of secondary education so as to determine \nparental willingness to spend on schooling. \nA household and a school survey were conducted in Mezam Division of the North \nWest Province of Cameroon. 335 households in urban and rural areas were involved in \nthe household survey, while 16 principals and 750 students, selected from 16 secondary \nschools, took part in the school survey. Results from these surveys indicate that in \ngovernment secondary schools, although tuition is provided free, parents are obliged to \nmeet the costs of books and uniforms. Moreover, because government funding is \ninadequate, by default, parents are obliged to contribute further towards the provision of \nadditional facilities in these schools through the Parent-Teacher Association (PTA). Thus \nparents incur substantial costs for their children's education, in relation to household \nincome and Gross National per Capita Income. The study also reveals that in the private \neducational sector, fees and other parental contributions, including PTA levies, form an \nimportant source of finance for secondary schools. Parents of government school students \nvalue the education of their children highly, and therefore indicated willingness to pay \nmore, even though they already incur substantial costs. The findings further indicate that \nwillingness to pay will be increased if the quality of education is improved. However, \nability to pay is related to family income and number of children, which have important \nimplications for equity which are discussed in the thesis. Finally the study reveals that the \nhighly centralized financing policy and practice in government secondary schools does not \ntake into account the fmancial capacity of communities and private individuals \nsufficiently. \nThe thesis argues that, in order to improve access, quality and efficiency of \neducational provision, an appropriate cost-sharing strategy needs to be developed to \nfinance government secondary schools, with provision of scholarships or other selective \nassistance to the most needy. The thesis suggests further that, efforts be made to explore \nparental willingness and the inherent self help tradition of the people, by encouraging \nlocal management and fmancing of schools. Hence support from individual users and \ncontributions from local communities through Parent-Teacher-Associations should be \nactively solicited. It also suggests that the decentralization of educational management of \nschools will go a long way towards enhancing educational quality and efficiency. This \nwill require some adjustments to the existing financing structures, and changes in the \nregulation and management of the education system. The successful implementation of \nthese recommendations require immense political will on the part of the policy makers.