Blockchain Papers

Luiz R. de Mello, Matias Barenstein

No abstract is available for this record.

Ian Livingstone, Roger Charlton

Uganda has been engaged for a number of years in an ambitious programme of political and financial decentralization involving significantly expanded expenditure and service delivery responsibilities for local governments in what are now forty‐five districts. Fiscal decentralization has involved allocation of block grants from the centre to complement increased local tax revenue‐raising efforts by districts and municipalities. This article is concerned with the financial side of decentralization and in particular with an examination of district government efforts to raise revenue with the tax instruments which have been assigned to them. These are found to be deficient in a number of ways and their tax raising potential not to be commensurate with the responsibilities being devolved. Achievement of the decentralization aims laid down, therefore, must depend either on the identification of new or modified methods of raising revenue locally, or increased commitment to transfer of financial resources from the centre, or both.

Andrew Sancton

Although Jane Jacobs acknowledges the existence of metropolitan areas; her main unit of analysis for local politics is the center-city municipality. She is interested in how it can be decentralized, both to districts and to neighborhoods. Because she is suspicious of large organizations, she is not an advocate of expanding the size of center-city municipalities or of creating elaborate schemes for metropolitan government. Because she believes that city-regions should be more politically autonomous does not mean that she believes that each should have only one municipal government. Jacobs never confuses the municipality as an institution of local government with the city-region as an incubator of economic activity. She never suggests that the economic fate of cities is determined by municipalities, however they might be organized. By keeping the importance of municipal government in perspective, her work helps us resist arguments that central-city municipalities must be enlarged in size so as to enable their respective cities to compete globally.

John N. Hawkins

China’s educational leaders have long debated the pluses and minuses of decentralization of control and resources of China’s vast educational enterprise. During various periods of post‐1949 China, the central authorities have devolved control to the provinces, key cities, and rural communes, only to recentralize later usually due to political reforms. In this chapter various stages of the educational reform movement begun in 1985 will be considered and we will focus on what motivated the reforms in the context of China’s unique political culture. Some specific features of educational decentralization will be examined such as finance, curriculum and management. We conclude that while the current leadership appears to be committed to decentralization, they remain conflicted over the need to maintain control while at the same time respond creatively to the needs of the new market economy.

William Jack

The author studies the
\n allocation-between a central government and a local
\n authority--of responsibility for planning, financing, and
\n operations for the delivery of health services, in the
\n context of an incomplete contracts model. In this model,
\n inputs are required of both the central government and local
\n authorities but they are unable to write down, and commit
\n to, a complete and binding contract describing the actions
\n both should take. The model is meant to capture the tradeoff
\n between central and local authority in decisions about both
\n financing and the provision of services. Each party provides
\n a specific input--for example, the central government
\n establishes a drug procurement system while the local
\n authority designs and implements an incentive scheme to get
\n doctors to carry out their responsibilities appropriately.
\n The responsibility for delivery of services is identified
\n with the ownership of essential infrastructure, such as the
\n clinic or hospital. The author finds that to maximize the
\n joint surplus of the two public bodies: Ownership of the
\n facility should be given to the party that most values the
\n well-being of local residents. (This way, if ex post
\n bargaining breaks down, each still enjoys some benefits from
\n the other's actions.) Financing authority and
\n responsibility for delivering services should be negatively
\n correlated. Generally it is optimal to allocate tax
\n authority to the party that values the residents'
\n well-being less--in other words, separate spending
\n responsibility (ownership) from financing authority. A
\n heavier financing burden (access to a small and inefficient
\n tax base) has the same incentive effect as asset ownership:
\n It increases the return to effort. If transferring ownership
\n of the physical asset is costly (because the party that
\n builds the asset has an inherent advantage in operating
\n it-that is, there is some human capital embodiment), it may
\n be optimal for the party with the higher construction costs
\n to have planning authority. Somewhat paradoxically, the
\n greater the costs of transferring assets from one party to
\n the other, the more likely that ownership of the facilities
\n and their provision should be separated.

Stan Chervin, Kelly D. Edmiston, Matthew N. Murray

Decentralized systems of government finance give rise to fiscal disparities due to interjurisdictional variations in tax bases and expenditure needs. Intergovernmental aid is used to address such disparities. This article explores changes in local tax capacity and intergovernmental aid resulting from urban shopping malls that extract retail sales and sales tax revenue away from surrounding areas, especially rural counties. A model is developed and estimated to determine the impact of urban malls on local government sales tax bases, controlling for sales tax rate differentials and other factors. The results reveal a 15.9% decline in the sales tax base for counties in close proximity to two newmalls. The analysis is extended to examine impacts of changing local tax capacity on state education aid. Based on the programconsidered here, less than 20% of the loss in own-source revenue is recovered through increased aid.

Guillaume Cheikbossian

No abstract is available for this record.

Timothy Besley, Stephen Coate

This paper takes a fresh look at the trade-off between centralized and decentralized provision of local public goods. The point of departure is to model a centralized system as one in which public spending is financed by general taxation, but districts can receive different levels of local public goods. In a world of benevolent governments, the disadvantages of centralization stressed in the existing literature disappear, suggesting that the case for decentralization must be driven by political economy considerations. Our political economy analysis assumes that under decentralization public goods are selected by locally elected representatives, while under a centralized system policy choices are determined by a legislature consisting of elected representatives from each district. We then study the role of taste heterogeneity, spillovers and legislative behaviour in determining the case for centralization.

Jiahua Che

I put forward a new theoretical framework to analyze the relationship between soft budget constraint syndrome and the economic performances of firms. It differs from the existing theoretical framework, à la Dewatripont and Maskin (1995), in the soft budget constraint literature. In this paper, soft budget constraint syndrome arises when firms that are expected to lose money are financed. The paper highlights a trade-off between hard and soft budget constraints. While soft budget constraints may compromise firms' incentives to improve performances, an all-out effort to harden budget constraints may put macro stability at risk, especially for economies suffering from allocative inefficiency. Based on this trade-off, the paper shows that a transition from centralized financing to decentralized financing in fact compromises firms' incentives to improve their performances, whereas a transition from centralized financing to a dual track system enhances efficiency. In the dual track system, budget constraints are soft in the centralized track but the macro stability of the economy is assured as a result. The macro stability enhances the disciplinary effect of hard budget constraints in the decentralized track, which in turn promotes firms' incentives to improve performances. The paper sheds light on a complementary relation between soft budget constraint syndrome in the state sector (i.e., the centralized track) and the remarkable growth of the non-state sector (i.e., the decentralized track) in China.

Herrington J. Bryce

ABSTRACT This is a study of devolution of power and responsibility to local governments in Russia, the resulting pressures on local revenues and expenditures, and the challenges these pose to local public administrators currently and for the foreseeable future. It is developed from nearly 100 hours of face-to-face interviews of top local public administrators in Cherepovetz, Russia, and from a careful reading and discussion of the parameters are which set by budget obligations, charters, federal, state, and local laws which set the legal and financial constraints within which the local public administrator works. INTRODUCTIOn Many areas in Russia have moved so rapidly toward privatization and local self-government that, today, the formal transition is nearly complete and problems of adjustment to and the instability of the new political and economic order are of concern.1 As a result of the devolution of power, a substantial number of these problems fall on the local public sector and the capacity of its administrators to administer a constantly growing body of laws and policies in the context of a dynamic environment in which previous Soviet law is irrelevant, gives wrong signals or is nonexistent. Recognizing this situation, the U.S. Agency for International Development (AID) created the Russia Market Oriented Farm Support Authority (MOFSA) project to uncover these problems with the hope of helping local public officials design appropriate public policy strategies to deal with them. This case study draws from the author's work with Chemonics International and the National Academy of Public Administration (NAPA) in MOFSA in 1996 in Cherepovetz, Russia. It also benefits from the author's experiences with local public administrators in the United States, Estonia, and the Republic of Georgia. This study addresses the questions: (1) What is the nature of the decentralization and the devolution of powers and responsibilities to local governments in Russia? and (2) What are the resulting budgetary problems reported by local public administrators charged with implementing the newly acquired responsibilities in a democratic setting? Thus, unlike the burgeoning literature on privatization, this study focuses on devolution and its impact on local public administrators. This area of study has received relatively little attention except by such authors as Bird, Freund, and Wallich (1995), Alm and Sjoquist (1995), Mitchneck (1995), Bird, Ebel, and Wallich (1995), and Wallich and Nayyar (1993). Yet, it is the local public administrator who implements these ever-changing laws within an ever-changing political environment described by the articles in Lapidus and Walker (1995). Some characteristics of this residue are described in Lavigne (1995) and Aslund (1995) but largely from the economic perspective. This article focuses on the issues as they relate to local public administration. METHOD This study is based on nearly 100 hours of interviews with fifteen senior government officials of the Cherepovetz raion, including the head and deputy head of the local governments, all ministers and directors of departments including finance and agriculture, the chief legal counsel, the director of municipal properties who was also responsible for privatizing and who represents the state on certain private boards, the director of housing and utilities, two rural administrators, the director and chief accountant of the largest business enterprises in the area, the head of the largest consumer cooperative, the director of a school, and the members of the 17-member legislative assembly. Each was interviewed separately and each participated in three full days of interactive seminars in which the findings, reported here, on how devolution and decentralization have affected local budgets, were intensively reviews. The individual interviews were basically open-ended to encourage candor and to reduce interviewer influence. …

隆雄 飯田, タカオ イイダ, Takao Iida

No abstract is available for this record.

George O. Assibey‐Mensah

Introduction Ghanaians have had to travel to Accra, our nation's capital, even for things as basic as passport application forms. Realizing that many of us travel long ways for numerous basic services from our central government, the government has instituted, through our Ministry, a program of public-service decentralization.(1) In 1987, Ghana's erstwhile military administration, the Provisional National Defence Council (PNDC) under Jerry Rawlings, decentralized both budgeting and economic development (hereafter referred to as ED) by instituting 110 District Assemblies or DAs.(2) The primary rationale is to effectively employ a basic human-needs or BHN approach to improve the living conditions of the people, using these DAs as the instruments for making localities determine their respective ED destinies.(3) This article is a recent case study of those subnational bodies, addressing certain important decentralization problems and issues in post-independent Ghana. The article also highlights some of the development dilemmas confronting developing societies of the world, particularly their subnational financing of development projects. Specifically, the article addresses the following questions: 1. Why were the District Assemblies instituted? 2. What specific roles do they play in grassroots ED? 3. What makes the implementation of their policies problematic? 4. How can these difficulties be ameliorated? The study offers fruitful and penetrating insights into some of the reasons for the success or failure of subnational governments not only in Ghana but also in developing countries. The focus of this article, however, is more the theoretical framework of decentralization within which the DAs operate and less the activities of these grassroots entities. The lack of that framework can best be understood when one considers the neglect of decentralization during the country's imperialist era. Colonial Neglect of Decentralization Since 1986, there has been a shift to subnational ED in Ghana under 110 DAs. To enable one to recognize the importance of this governmental action, one needs to be familiar with the country's administrative scene before independence in 1957. During the country's colonial administration (and for the greater part of the post-independence era), the governmental apparatus for political and economic decisionmaking was highly centralized. There was little or no involvement of the local communities, a system resulting in poorly planned and poorly executed district and regional projects. In particular, the country's colonial administrators limited their governing role to a few public-works projects, notably feeder roads to areas with foreign-exchange-earning commodities (e.g., gold, cocoa, etc.), as well as to maintaining law and order. Therefore, the national budget was small. The point of the foregoing is that ED, as we know it today, was virtually unknown.(4) Also, budgeting for the purposes of improving the people's human conditions was not a major objective of the colonial administrators, and it was not until after independence that Ghana's public budgets have been designed to reflect meaningful and realistic ED programs/projects.(5) Contemporary Governmental Decentralization Efforts As a consequence of the age-old problems of high centralization and lack of citizens' participation in governance that partly resulted from the lack of a meaningful ED-budgeting process, disparity in the provision of socio-economic infrastructure between urban and rural dwellers was exacerbated. Therefore, in 1983, the country's military regime of Jerry Rawlings initiated the process of statutorily empowering the Ministry of Local Government to embark on programs to decentralize the country's public decisionmaking process, especially as it relates to budgeting for ED purposes. The measure purports to directly involve local communities in decisions affecting them, and, thus, improve overall public administration and financial administration at the grassroots level. …

Ashok Kumar Lahiri

this paper was presented at the Institute for Social and Economic Change (ISEC)-World Bank Institute Conference on "Decentralization and the Making of Sub-national Policy" at Bangalore on May 25, 1999.

Dietmar Wellisch

Active tax competition, in short, tends to produce either a generally low level of state–local tax effort or a state–local tax structure with strong regressive features . George Break (1967) The mobility of individual economic units among different localities places fairly narrow limits on the capacity for local income redistribution . Wallace Oates (1977) Policies that promote residential mobility and increase the knowledge of the consumer–voter will improve the allocation of government expenditures in the same sense that mobility among jobs and knowledge relevant to the location of industry and labor improve the allocation of private resources . Charles Tiebout (1956) If jurisdictions compete with each other and taxpayers/consumers are able to vote with their feet, there may be fairly strong pressures for subnational governments to respond to the wishes of the electorate . Charles McLure, Jr. (1986) Assignment of Government Functions and Mobility Assignment of Government Functions Issues of public finance appear in a new light when an economy is divided into several regions. If a state consists of many jurisdictions, the question arises of how to assign the various government activities to different governmental levels. The general functions of the government – to support an efficient allocation of scarce resources (where the private sector fails to do so) and to guarantee a fair income distribution – must first be divided into several components. Once a fundamental line of government policy is chosen, these functions must be assigned to the jurisdictions.

Guillém López i Casasnovas, Esther Martínez Garcia

The authors analyse the magnitude and composition of the fiscal imbalance between Catalonia and the Spanish Central government for 1995-1998, and its evolution since 1986. A flow approach is adopted, whereas the usual incidence hypothesis is followed in alloating tax revenues. The results show a rather stable net contribution of Catalonia to the Spanish Central government in 1998 of 1.3 trillion pesetas (8.37% of Catalan GDP). Calalonia participated in 19.60 % of Central government revenues, but received only 15.03% of expenditures. Catalan population is 15.5% of the Spanish total. Overall, in 1994 constant terms, the evolution of the per capita imbalance rises from 117,133 PTAs. in 1986, to 192,294 PTAs. in 1998. The authors also introduce an explicit way to deal with the effects of Central government budget deficits on fiscal revenues, in computing the financial distortions of the political and economic central role of Madrid, different tax compliance among regions, the impact of inflation differentials, and the evaluation of the social security flows on regional imbalances. In general, the authors favour an estimation of the amount of revenues at the disposal of Catalonia in order to finance its own expenditure, without the mediation of the Central government, but maintaining a single Spanish fiscal system. This approach may force the contribution of Catalonia as any other region to finance the joint expenditures of the Central government, and/or to finance its owm public sector, but in a rather more dear way. As a result, with regard to the financial decentralization system, territorial solidarity and social cohesion is enhanced, at the same time that autonomy and self-governance, in a better way than it is today.

Miguel Urquiola

No abstract is available for this record.

Richard Briffault

Localism and regionalism are normally seen as conflicting, conceptions of metropolitan area governance. Localism is the belief that the existing system of a large number of relatively small governments wielding power over such critical matters as land use regulation, local taxation, and the financing of local public services ought to be preserved. Regionalism would move some power to institutions, organizations or procedures with a larger territorial scope and more population than existing local governments. Regionalism appears to be a step towards centralization, and the antithesis of the decentralization represented by localism. Yet, in the metropolitan areas that dominate America at the end of the twentieth century, regionalism is not just the enemy of localism: It is also localism's logical extension. Localism is based on a set of arguments concerning the role of local governments in promoting governmental efficiency, democracy, and community. But in contemporary metropolitan areas, the economically, socially, and ecologically relevant local area is often the region. In these areas, concerns about efficiency, democracy, and community ought to lead to a shift in power from existing localities to new processes, structures, or organizations that can promote decision-making on behalf of the region. Regionalism is, thus, localism for metropolitan areas. Localists, however, do not become regionalists when they live in metropolitan areas. Indeed, resistance to regionalism is intense in many metropolitan areas. Localism is not simply a theory intended to advance certain normative goals. It is also a means of protecting the interests of those who receive advantages from the existing governance structure. Local self-interest, rather than the political values localism is said to advance, plays a central role in the opposition to regionalism. This essay explores the relationship between localism and regionalism. It considers the meaning of regionalism in contemporary urban policy debates and the reasons why regionalism currently enjoys so much attention from academics, urbanists and policy analysts. It reviews the arguments for localism, and explains how, despite the asserted conflict between localism and regionalism, the theories underlying localism actually make a case for regionalism in contemporary metropolitan areas. Finally, it examines the role of local self-interest in the resistance to regionalism, and the efforts of regionalists to respond by making the case for regionalism in terms of local self-interest as well.

Kunihiko Omura

No abstract is available for this record.

Massimo Bordignon

Problems of `soft budget` constraints in intergovernmental relationships are currently at the frontier of research in local public economics. This paper reviews the Italian experience in the field, starting from the mid-1970s up to the present period, compares it with that of other countries, and uses it to comment upon the state of the literature. The paper argues that the soft budget constraint problem has been a rampant one in Italian local public finance, generating efficiency losses, lack of political accountability and undermining the soundness of public finances. The paper inquires into the causes and possible solutions to the problem, and in particular describes and comments upon the decentralization process of the 1990s. Finally, the Italian debate on fiscal federalism of the 1990s is also reviewed, arguing that some of the suggestions of this debate may be of interest more generally.

Shahid Javed Burki, Guillermo Perry, Florence Eid

As the world's economy marches toward globalization, people are debating globalization's effect on the poor in developing countries. Will the developing countries be left behind? How can they be helped? What does globalization have to offer them? Since most of the countries in the Latin America and Caribbean region are considered developing countries, the issue of these effects is especially pertinent and it formed the focus of the discussions at this conference. This publication presents some of the papers submitted at this annual conference, the fifth one focusing on developing economies in the region. The 1999 Proceedings talks about decentralization and the need to bring government closer to the people in a rapidly changing global economic environment. For developing countries to realize the power of globalization, they need to concentrate on the power of decentralization, that is, getting their citizens involved in their own development and defining their own future. The aim of these discussions and this publication is to impart the knowledge needed to turn globalization into an asset rather than a liability. To accomplish this goal, the publication focuses on three subject areas: a framework for fiscal federalism; sectoral issues; and local financing and management capacity. This publication will be of interest to academics, policymakers, and decentralization experts.

D. D. M. Waidyasekera

No abstract is available for this record.

Pranab Bardhan, Dilip Mookherjee

Corruption and targeting failures in the delivery of public services in developing countries has frequently been argued to result from absence of controls on the behavior of central bureaucrats delegated authority over their implementation.This has motivated recent initiatives towards decentralization of service procurement and delivery to elected local governments that are expected to be more accountable to user interests.However, if local democracy is prone to capture by local elites, decentralization can also be subject to diversion and targeting failures.This paper presents an analytical framework to evaluate the resulting trade-off, and predict the effects of decentralization on volume and allocation of service delivery under different financing mechanisms.

Joseph J. Capuno

Like many developing countries, the Philippines has decentralized its public health system. Despite its supposed advantages, however, the decentralization, has not led to widespread improvements in local provision. This is partly because many local government units are found financially inadequate since the current revenue-sharing scheme does not factor in the distribution of the devolved expenditure responsibilities across LGU. Moreover, this particular flaw in the present revenue-sharing scheme has made corrective policy measures more difficult to undertake since it is no longer sufficient to compensate those LGUs originally with financing difficulties. More crucially, it has also become politically necessary to compensate those adversely affected by the corrective policy measure. If only to avoid the added cost of further adjustments, the experience of the Philippines underscores the importance of a well-designed and carefully implemented decentralization program.

Caroline Hoxby

No abstract is available for this record.