Mohammed Ibrahim Gariba, Samuel Amponsah Odei, Frank Febiri, Romana Provazníková
The motivation of this research is the surge in the integration of the digital economy (DE) and fiscal decentralization (FD) as crucial issues for countries. To maintain sustainable growth, it is important for EU to adopt sustainable development goal (SDGs) practices. However, the connection between DE, FD, and SDG practices has not been thoroughly examined in existing literature. Therefore, the objective of this study was to examine the mediating role of DE between FD and SDGs in EU. We employed a panel dataset between 2016 and 2022 from Eurostat, the Organization for Economic Cooperation and Development, and Government Finance Statistics, using a quantitative research design, and applied the structural equation model (PLS-SEM) analysis to test the hypotheses. The results indicate that FD has a significant negative effect on economic sustainability but a significant positive effect on environmental and social SDGs. In addition, FD has a significant positive effect on DE. We also found that DE has a significant positive relationship with economic and social SDGs. However, DE has a negative but significant influence on environmental sustainability. This study also proved that DE plays a mediating role between FD and Sustainability. This study contributes to theories of fiscal federalism and resource dependency. These original findings have several practical implications for policymakers and contribute to the current debate on the role of FD in SDGs through DE. hence, we recommend that policymakers prioritize the development of broadband Internet access, e-governance resources, and invest in digital skill training programs.
Abdul Hamid Paddu, Indraswati Tri Abdi Reviane, Nur Dwiana Sari Saudi, Fitriwati Djam’an · 6 authors
This study investigates a fresh perspective on how natural resource rents (NRR) and quantity of natural resources (QNR) modulate the influence of fiscal decentralization (FD) and the Financial Development Index (FDI) on energy efficiency (ENE) and CO2 Emissions. We draw upon the Stochastic Impacts of Regression on Population, Affluence, and Technology framework, taking the BRICS countries as the subject of investigation from 1986 through 2021. Using a panel Method of Moments Quantile Regression with fixed effects, our results suggest that fiscal decentralization is favorable for environmental stability, particularly in BRICS countries with higher energy efficiency and CO2 Emission levels. Increased FDI proves environmentally harmful, with pronounced effects in more energy-efficient nations. Regarding direct influences, NRR and QNR hinder energy and CO2 efficiency, notably in countries with lower energy efficiency and CO2 emissions. Regarding indirect effects, NRR and QNR positively steer the impact of fiscal decentralization and the Financial Development Index on energy efficiency and CO2 Emissions, exhibiting stronger effects in energy-efficient nations. Among other control variables, Eco-Innovation (ECO_INNO), Solar energy production (SEP), Population (POP), and Economic Growth (GDP) foster environmental stability. We propose that fiscal decentralization should be based on a clear and responsible subnational government framework to counter rent-seeking behaviors and weak environmental conservation. Further, inclusive finance must strengthen the accessibility and cost-effectiveness of financial solutions for economic agents, promoting green consumption and investment initiatives to reach environmental stability and other Sustainable Development Goals.
Introduction. The implementation of the decentralization reform in Ukraine led to an increase in public interest in the indicators laid down in the budgets of territorial communities and the results of their execution. Problem Statement. Availability and openness of information about budgets as a prerequisite for effective control over public finances of territorial communities. Purpose. Analysis of legal acts that establish requirements for disclosure of information about local budgets, providing recommendations for ensuring compliance in practice with the principle of publicity and transparency of the budget process as an important prerequisite for effective control over public finances. Methods. General scientific methods are used, namely: description, comparison, monographic, theoretical generalization. Results. The legal documents regulating the implementation of the principle of publicity and transparency of the budget process in Ukraine are analyzed, the contradictory and ambiguous norms contained in such documents are outlined, the mistakes made by the authorized persons of local councils when disclosing information about budgets are emphasized, the possibilities that provided by the state web portal Open budget, methods of raising the state of awareness of interested persons on issues of budget formation and execution are substantiated. Conclusions. Part of the public data on issues of formation and execution of budgets of territorial communities still remains inaccessible to information users. Increasing the transparency of budgets with the creation of opportunities for full-fledged control of public funds will become possible under the condition of legislative consolidation of norms on the obligation of managers to publish information on budget and financial reporting on the execution of local budgets within the terms and according to the forms approved by the current orders of the Ministry of Finance of Ukraine, disclosure of information on budget expenditures and lending operations, grouped, among other things, by departmental classification, which will be a prerequisite for researchers to have a holistic view of spending budget funds. Public information about budget indicators on the websites of local councils should be systematized, submitted in formats that allow further processing of the published data with the possibility of simple and unlimited access to them.
Constant Fouopi Djiogap, Justin Romuald Amougou Manga, Simon Pierre Onana, Fabrice Ewolo Bitoto
Abstract We study the effects of fiscal decentralization on people's access to health and education services in Cameroon. It is generally believed that fiscal decentralization is an essential way to improve people's access to social services such as education and health. After reviewing the literature, we employed the Driscoll and Kraay estimate in a sample of 45 rural and urban municipalities for the period 2010–2020 to find our results. The results show that fiscal decentralization has a positive effect on the number of classrooms per pupil and the number of desks per pupil. At the same time, it negatively affects public hospitals per capita and the state of public hospitals. To improve people's access to education and health services in Cameroon, it is necessary to encourage the transfer of powers to municipalities. There is a need to control the actions of local officials to avoid mismanagement of resources that will not benefit the population. Also, the responsibility for selecting communal projects financed via the public investment budget within the framework of decentralization should be exclusively that of municipal executives, and not that of the central government.
The government provides financial assistance to regions in the form of intergovernmental transfers from the State Budget (APBN) to support decentralisation policies, used to finance regional needs, such as infrastructure development and public services. The aim is to improve the welfare of the local population and enhance local autonomy in decision-making, financial management, and reduce fiscal disparities between the central and local governments, as well as between different regions. The central government delegates sources of financial revenue to the regions to be managed effectively and efficiently, including through regional own-source revenues (PAD), to support regional autonomy and fund its tasks and functions. This qualitative research aims to test and analyse: (1) The effect of local own-source revenue (PAD) effectiveness on fiscal decentralisation in the region. (2) The effect of local own-source revenue (PAD) growth on fiscal decentralisation in the regions. (3) The effect of effectiveness and growth of local own-source revenue (PAD) on fiscal decentralisation in the region. The object of research is the PAD Realisation Report of Purwakarta Regency from 2018 to 2022. The sample consists of five reports, namely the PAD report for the 2018-2022 period. There are three points from the results of this study: (1) PAD effectiveness has no significant influence on fiscal decentralisation in the region (significance value 0.216 > 0.05); (2) PAD growth has no significant influence on fiscal decentralisation, (significance value 0.216 > 0.05); PAD effectiveness and growth have no significant influence on fiscal decentralisation, (significance value 0.385 > 0.05).
The study aims to examine the current state of property tax administration in Zimbabwean local authorities under the conditions of digitalization. Property taxes within the Zimbabwean local tax system are significantly under-collected, necessitating an urgent enhancement of their contribution to local authority budgets. A quantitative research approach was adopted, collecting data through questionnaires from a target population of 60 staff members within an urban local authority. Purposive sampling was employed to select Chief Executive Officers, Heads of Departments, and staff directly involved with Information and Communication Technology (ICT) and Property Tax Administration, including ICT departments, accounting and finance staff, and engineering departments. Additionally, residential and commercial property owners were conveniently sampled based on availability and willingness to participate, resulting in a total sample size of 46 respondents. The findings reveal a significant positive relationship between Information Technology and property tax administration, suggesting that policymakers should prioritize digitization to enhance effective tax administration. Furthermore, control variables such as population, trade, and GDP were found to have significant relationships with tax administration in Zimbabwe. The introduction of ICTs has been shown to improve the efficiency and effectiveness of property tax administration, underscoring its critical role in the fiscal decentralization of local governments.
An increase in sources of local authority’s revenue in both developed and developing countries has compelled governments to develop policies and laws aimed at guiding local authorities in revenue mobilization. The Zambian government, to be specific, has over the years developed quite many laws for this venture. In addition to the constitutional provision, other pieces of legislation guiding local authorities’ revenue mobilization in Zambia include; the Public Finance Management Act, No. 1 of 2018, Local Government Act, No. 2 of 2019, the Property Transfer Tax (Amendment) Act, 2019, Market and Bus Station Act. No.7 of 2007, the Valuation Surveyors Act, the Rating Act No. 21 of 2018, and the Personal Levy Act of 1996. This paper explores the adequacy of Zambia’s Legal Framework for Local Authorities Revenue Mobilization. The respondents were purposively sampled from the Ministry of Finance, the Ministry of Local Government, the Decentralization Secretariat, and the Local Authorities. Moreover, the various sources of local authorities’ revenue and pieces of legislation are discussed. Zambia has an adequate legal framework guiding local authority revenue mobilization. It is for this reason that local authorities are encouraged to adhere to the legal framework at all costs if they are to effectively generate revenue and play an effective role in enhancing development.
This chapter presents an account of the sources of local finance in the American political system. ‘Local’ refers to local governments, but principally municipalities, rather than school districts, townships or other special districts. Altogether there are over 80,000 units of local government in the United States. The purpose of this review is to contrast the situation in Britain with that of the United States against the capacity of local authorities to raise and control their finances. The central argument is that the differences between the two countries in this regard hinge critically upon the degree of local autonomy found in each political system. Local autonomy is fundamentally a political issue deriving from the nature of central-local relations in each country and the political assumptions informing these respective relationships influenced by the political culture. The United States is a federal polity imbued throughout with the culture of decentralization and local autonomy: local governments remain creatures of their regional states (see below), though they exercise some autonomy within those constraints. By contrast, British local authorities are tightly constrained by Parliamentary legislation as to what they can and cannot do. But there is an important tradition of local authorities determining their own revenue needs and allocation of their funds in Britain: it is this tradition which has been eroded since the 1970s by the central government, manifested most forcibly in the realm of central-local financial relations. This erosion of local autonomy is a political process motivated and shaped by political interests and concerns. Economic, and other, rationales may well be produced for particular arrangements but these must be analysed in their political context.
Dr.Natasha Hoda, Msc.Majlinda Velçani, Prof. Asc.Dr. Parashqevi Draçi, Blerina Sadiku
<p style="margin-left:0cm; margin-right:0cm; text-align:justify"><strong>The financial situation of local government units in the Albania, even though it has improved compared to the decades ago, is still delicate and full of challenges for the future. Financial resources, without neglecting the capacity building of th
This paper investigates the impact of digital inclusive financial development on local government expenditure incentives at the income level. It does so by constructing a multi-level government Dynamic Stochastic General Equilibrium (DSGE) model that incorporates the financial sector. By employing empirical methods that involve uncertainty shocks and counterfactual simulations, the research yields several key findings. Firstly, the development of digital inclusive finance contributes to breaking down the urban-rural dual financial structure, thus facilitating balanced economic development within regions. Secondly, it reduces the proportion of financially excluded areas, accelerates fiscal decentralization, leading to an increase in local government fiscal revenue, and, consequently, an expansion of local fiscal expenditures. Thirdly, at a certain stage of digital inclusive finance development, it tends to crowd out residents' investment and consumption. Therefore, the decentralization of fiscal power and the expansion of local government expenditure at this stage may paradoxically inhibit regional economic growth. The study's conclusions validate the significant impact of digital inclusive finance on local government incentives at the income level.
This paper investigates the distribution of public school expenditures across U.S. school districts using a bayesian maximum entropy model. Covering the period 2000-2016, I explore how inter-jurisdictional competition and household choice influence spending patterns within the public education sector, providing a novel empirical treatment of the Tiebout hypothesis within a statistical equilibrium framework. The analysis reveals that these expenditures are characterized by sharply peaked and positively skewed distributions, suggesting significant socioeconomic stratification. Employing Bayesian inference and Markov Chain Monte Carlo (MCMC) sampling, I fit these patterns into a statistical equilibrium model to elucidate the roles of competition, as well as household mobility and arbitrage in shaping the distribution of educational spending. The analysis reveals how the scale parameters associated with competition and household choice critically shape the equilibrium outcomes. The model and analysis offer a statistical basis for shaping policy measures intended to affect distributional outcomes in scenarios characterized by the decentralized provision of local public goods.
The system of financial support of the social process of the country must constantly adapt to the influences of the external environment both in the conditions of the hybrid war with Russia and in the conditions of the post-war period. This requires systemic transformational changes in the socio-economic environment, reform of the financial system, further improvement of the decentralization of the management of state financial resources, since expenditures from the state budget to cover the costs of armaments and ensuring the independence of Ukraine will have a large specific weight annually. Under such conditions, local budgets will rely more and more every day on the tasks of financing a significant part of the social needs of the local population. Accordingly, the effectiveness of regional systems of taxation of individual territories with local taxes and fees is primarily confirmed by volumes sufficient to form the revenue part of local budgets for the purposes of ensuring the successful functioning of territories of local importance and their development. Therefore, the role of local taxes and fees is growing daily and contributes to the accumulation of the amount of financial resources necessary for the development of both territorial communities and the state as a whole, which will significantly reduce the burden on the state budget of the country. The article examines problematic aspects of the formation of revenues and expenditures of local budgets in difficult economic conditions arising under the influence of a hybrid war with Russia. Emphasis is placed on the necessity of restructuring the national budget policy in the context of the formation of guarantees for the financial support of the social needs of the population of Ukraine, its comprehensive protection and the creation of decent working and living conditions. The important role of local taxes in the formation of revenues of local budgets of territorial communities is substantiated based on the systematization of the approaches of scientists and the conducted expert assessment of the state and changes of local budgets in 2021-2022. Problematic aspects in the payment of local taxes are identified and the ways to solve them are outlined. The need for further improvement of the tax legislation, capable of ensuring the formation of a new tax model for the purposes of optimizing the tax regulation of payment of local taxes and increasing revenues to the local budget, has been proved.
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.
в то время как искусственный интеллект готов изменить то, как мы живем, учимся и работаем, слияние технологий искусственного интеллекта и блокчейна изменит глобальную финансовую экосистему. DeFi продолжает разрушать традиционные финансы, он предоставляет огромные возможности для финансовой доступности и инноваций. Однако для устойчивого роста необходимо решать проблемы, связанные с регулированием, безопасностью и масштабируемостью. Оставаясь в курсе последних тенденций и активно участвуя в экосистеме DeFi, частные лица и организации могут внести свой вклад в формирование будущего финансов. Финансовая индустрия изучает возможность его использования для замены дорогостоящих и неэффективных платежных систем, а также может трансформировать цепочки поставок в сочетании с Интернетом вещей и искусственным интеллектом. Кроме того, блокчейн может облегчить практическое использование смарт-контрактов и цифровых удостоверений. Тем не менее, все еще остаются вопросы, связанные с оптимальным использованием технологии, ее воздействием на окружающую среду и управлением. while artificial intelligence is poised to change the way we live, study and work, the fusion of artificial intelligence and blockchain technologies will transform the global financial ecosystem. DeFi continues to disrupt traditional finance, it provides huge opportunities for financial inclusion and innovation. However, for sustainable growth, regulatory, security, and scalability issues must be addressed. By staying up to date with the latest trends and actively participating in the DeFi ecosystem, individuals and organizations can contribute to shaping the future of finance. The financial industry is exploring the possibility of using it to replace expensive and inefficient payment systems, and it can also transform supply chains in combination with the Internet of Things and artificial intelligence. In addition, blockchain can facilitate the practical use of smart contracts and digital identities. Nevertheless, there are still issues related to the optimal use of technology, its environmental impact and management.
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.
Jorge Martínez-Vázquez, Eduardo Sanz Arcega, José Manuel Tránchez-Martín
The aim of this chapter is to offer an overview of best practices for subnational fiscal governance. Based on the theoretical and international empirical evidence on fiscal decentralization design, we address the comon four pillars that encompass any subantional financing system: expenditure responsibilities, sources of revenue, the system of intergovernmental transfers, and credit and borrowing. Last but not least, we highlight the crucial importance of formal and informal political institutions in making decentralization work. All in all, beyond purely fiscal issues the eventual performance of any decentralized setting may depend on the institutions that make (or do not make) it work.
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 People’s Republic of China’s (PRC) fiscal system is characterized by very high expenditure decentralization and heavy reliance on transfers to finance public services. The government’s embrace of inclusiveness and equalization as national goals has raised questions about whether transfers can deliver equalization. This paper seeks to answer this question by analyzing newly available fiscal data compiled from government websites. We find the allocation of central transfers remains strongly region based, resulting in high intra-regional inequality among provinces. Poorer provinces also tend to retain more central transfers at their own (provincial) level. Those provinces with greater pretransfer inequality tend to exert greater equalization efforts, but these are not necessarily proportional to their pretransfer inequality. As a result, some localities are left out of the PRC’s countrywide equalization program. These equalization patterns remained highly persistent during the coronavirus disease shock in 2020. Collectively, the findings highlight that the PRC’s complex intergovernmental fiscal system still poses challenges for equalization.
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 chapter explores how digital technologies are reshaping decentralization in our fast-evolving technological era. It defines decentralization and examines its diverse aspects in politics, economics, and technology. The chapter emphasizes blockchain technology, highlighting its immutability, decentralized consensus, and smart contracts as pivotal elements driving decentralized applications and disrupting traditional paradigms. To provide context, it conducts a thorough literature review, tracing decentralization's historical evolution, exploring its impact on various sectors like decentralized finance, governance, financial inclusion, and system resilience. The chapter also addresses challenges such as regulatory uncertainties, scalability issues, and security concerns, drawing from authoritative sources and academic research. In conclusion, it sets the stage for a deeper exploration of decentralization's applications and impact across sectors, acknowledging both its potential and complexity as a transformative paradigm shift.
Environment policies have evolved over the years around the world, in part due to growing awareness among the population of the challenges posed by climate change. The decentralization of policymaking, administrative and political responsibilities to the subnational levels of administration may also have played a part to the extent that it creates room for bottom-up policy experimentation and citizen participation in policy design, including in areas related to the environment, that may influence people’s preferences and attitudes and ultimately government policy. To shed light on these linkages, this paper provides cross-country empirical evidence based on national accounts data that decentralization is associated with higher government spending on environment-related programmes, as well as higher collection of environmental taxes in the advanced economies, controlling for conventional public finance covariates.