Understanding the context of fiscal decentralisation. One important factor in determining the type of fiscal decentralization is the extent to which subnational entities are given autonomy to determine the allocation of their expenditures. Pdf on jan 1, 2018, roy bahl and others published fiscal decentralization and local finance in developing countries find, read and cite all the research you need on researchgate. Fiscal decentralisation in developing countries chr. The country has made important first steps in the decentralization process, but as yet. Fiscal decentralisation overseas development institute. Fiscal decentralization in developing countries download. Fiscal decentralization in developing countries university. Many commentators, however, have expressed concern that the. An indepth analysis of the fundamental role that decentralization plays in developing countries, using detailed statistical data to examine the actual fiscal structure between tiers of government, and the effects of decentralization at the local, national and international levels. Income inequality, fiscal decentralization and transfer. We use a panel data set of 46 countries over the 19701989 period to investigate the relationship between fiscal decentralization and economic growth. Fiscal decentralization in developing countries edited by.
Developing nations, however, have ver y dif fer ent insti tutional frameworks. Mongolia appears as a positive outlier, mainly because of its very low population density with respect to other developing. This site is like a library, use search box in the widget to get ebook that you want. Bird and francois vaillancourt, electronic book represents a specific, individual, material embodiment of a distinct intellectual or artistic creation found in university of liverpool. Based on the panel dataset from 1999 to 2012, this research is focusing on china, showing that it does not exist a simple linear relationship among fiscal decentralization, corruption and urbanrural in. Fiscal decentralization and the efficiency of public service.
The case for countercyclical fiscal stimulus will therefore depend on the individual circumstances of each developing country. However, for developing countries, such as indonesia, decentralization is not adequately. This book, based on a research project at the world bank, develops an analytical framework for considering the issues related to soft budget constraints, including the institutions, history, and policies. This article addresses the issue of fiscal decentralization in developing countries, and the use of intergovernmental transfers to achieve this objective. The virtues and reality of decentralizing governance in. Fiscal decentralization and local finance in developing countries. Fiscal decentralization has been considered as one of the essential institutional forces that can improve the quality of public goods and services as well as the allocation efficiency of regional resources in developing countries.
Bird this book draws on experiences in developing countries to bridge the gap between the conventional textbook treatment of fiscal decentralization and the actual practice of subnational government finance. Oates the point of departure for my contribution to this symposium is the striking contrast in the extent of fiscal centralization of the industrialized and the developing countries. The extensive literature about the theory and practice is surveyed, and longstanding problems and new questions are addressed. We find a negative relationship between fiscal decentralization and growth in developing countries, but none in developed countries. Fiscal decentralization and the efficiency of public. However, shortterm stabilization should not be the only or primary lens through which developing countries assess the usefulness of fiscal policy. To guarantee a minimum level of public service and basic needs or standard of living for the entire population regardless of their geographical location, the central government often. Mar 30, 2018 this book draws on experiences in developing countries to bridge the gap between the conventional textbook treatment of fiscal decentralization and the actual practice of subnational government finance. Decentralization is frequently seen to provide an impact for the development of local government. The role of fiscal policy in developed economies is to maintain full employment and tabilize growth. Fiscal decentralization and intergovernmental transfers in. Fiscal decentralisation in developing countries essons for. Fiscal decentralisation in developing countries essons for bangladesh there is an ongoing debate in bangladesh in civil society and among policymakers, whether the country should move from a highly centralised unitary state to a more devolved entity. Fiscal decentralization involves shifting some responsibilities for expenditures andor revenues to lower levels of government.
An overview edited by professors bird and vaillancourt and featuring important research from leading scholars assesses the progress, problems and potentials of fiscal decentralization in a variety of developing countries around the world. Fiscal policy developing countries, intergovernmental fiscal relations developing countries, decentralization in government developing countries publisher cambridge, u. Empirical work examining the effects of fiscal decentralization on income inequality has generally shown a conditional negative relationship between income inequality and fiscal decentralization. Achievements and challenges deribe assefa lecturer, ethiopian civil service university abstract as one of the major dimensions of decentralization reform program, fiscal decentralization has been a worldwide phenomenon since the 1980s and since 1991 in ethiopia. Subnational expenditures in developing countries as a percentage of total public expenditures have also increased over the past two decades. However, for developing countries, such as indonesia, decentralization is. Political decentralization has advanced in most countries. Distribution of conditional transfers contents acknowledgements 3 1. This brief examines fiscal decentralisation experiences in developing countries and explores factors affecting the reform process that could inform future policy and research on fiscal. We leave these issues to others and focus on fiscal decentralization. This fiscal decentralisation paper forms part of a series of introductory guides on key. Fiscal decentralization determinants and local economic development in eu countries anca florentina gavriluta vatamanu, florin oprea abstract this work aims to assess the impact of fiscal decentralization on local regional development in the eu member states while controlling for macroeconomic and local autonomy specific factors.
Countries are reconsidering their fiscal systems and searching for the right balance between central government control and decentralized governance. About the asian development bank fiscal decentralization. A broader view of fiscal decentralization in developing countries. Given that the w orld bank s work is exclusively in developing countries, it must careful. According to the world bank 1999, some 95% of democracies now have elected subnational governments, and countries everywhere are devolving political. This book draws on experiences in developing countries to bridge the gap between the conventional textbook treatment of fiscal decentralization and the actual practice of subnational government finance. Fiscal decentralizationthe decentralization of governance, expenditure deliv ery, and revenue mobilizationis an expressed goal of the national governments of many developing countries and part of their economic development strategy. Fiscal decentralization in developing countries the web site. Fd is a political economy trend in both developing and developed countries. How the chinese fiscal decentralization frustrate its. This public financial management introductory guide defines fiscal decentralisation and discusses how it fits into to wider decentralisation policy. The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of.
Pdf on jan 1, 2018, roy bahl and others published fiscal decentralization and local fina nce in dev eloping countries find, read and cite all the research you need on researchgate. During the past two decades, many developing countries have implemented decentralisation reforms. Wider working paper 2016172 fiscal decentralization. Fiscal decentralization, public spending, and economic. This movement is partly justified by appeal to the classic argument of tiebout 1956, who claimed that decentralized provision of public goods allows better fulfillment of diverse individual demands. Developing economies are characterized by low levels of. Pdf epub fiscal decentralization and development pp 1538 cite as. An indepth analysis of the fundamental role that decentralization plays in developing countries, using detailed statistical data to examine the actual fiscal structure between tiers of government, and the effects of. Pdf fiscal decentralization and local finance in developing.
Fiscal decentralization in developing countries edited by richard m. Fiscal decentralization, corruption and urbanrural income. The extensive literature about the theory and practice is surveyed and longstanding problems and new questions are addressed. Decentralization policies in asian development download. An overview edited by professors bird and vaillancourt and featuring important research from leading scholars assesses the progress, problems and potentials of fiscal decentralization in a. Fiscal decentralization and local finance in developing. Until now, however, there has been little understanding of how decentralization leads to large fiscal deficits and macroeconomic instability.
A movement toward fiscal decentralization is underway in many countries across the world. This is a working document published informally by the world bank. Decentralization in government developing countries. About the asian development bank fiscal decentralization in asia. Pdf on jan 1, 2000, paul smoke and others published fiscal decentralization in developing countries. Rethinking decentralization in developing countries. We find that developing countries have more centralized fiscal structures and argue that this is consistent with the theory of fiscal federalism. The ongoing wave of decentralization in developing countries invariably includes fiscal reformsthe assignment of expenditure and revenue responsibilities to subnational governments many efforts, however, even those that closely follow key reform principles, are usually at best modestly successful. Decentralization is a complex phenomenon involving many geographic entities, societal actors and social sectors. Fiscal decentralization and the challenge of hard budget. However, along with the chinese economys miracle growth. The virtues and reality of decentralizing governance in developing countries have been the subject of vigorous debate since that time, and the fiscal aspect of decentralization has certainly been one aspect of that debate.
Evidence from oecd countries abstract this paper attempts to identify the effect of fiscal decentralization on public sector efficiency pse. A broader view of fiscal decentralization in developing. In contrast, in developing countries, fiscal policy is used to create an environment for rapid economic growth. Fiscal decentralization and options for donor harmonisation. Pdf fiscal decentralization in developing countries. We find that in developing countries a higher level of decentralization is associated with an increase in the size of the shadow economy, while in developed.
The ongoing wave of decentralization in developing countries invariably includes fiscal reformsthe assignment of expenditure and revenue responsibilities to subnational governments. Click download or read online button to get fiscal decentralization in developing countries book now. Trade and development isbn 0 521 64143 8 hardbound 1. Fiscal decentralization in developing and transition economies. The paper concludes with some observations on how to think about designing more appropriate and effective fiscal decentralization in developing countries. Bird this book draws on experiences in developing countries to bridge the gap between the conventional textbook treatment of fiscal decentralization and the actual practice of. We employ data envelopment analysis on a panel of 21 oecd countries over the.
It outlines the reasons why decentralisation is usually undertaken in developing countries and how the administrative, political and fiscal. The item fiscal decentralization in developing countries, edited by richard m. Studies in fiscal federalism and statelocal finance series roy bahl and richard m. A large number of developing countries that are politically, economically and ideologically diverse began decentralizing development planning and management functions during the 1970s and early 1980s, because of growing dissatisfaction with the results. Shabbir cheema world bank staff working papers number 581 management and development series. Fiscal decentralization forms the backbone of myanmars efforts to strengthen public services, encourage development across the country, and secure peace and stability. Much of the literature on decentralization, normative and empirical, is based on industrial countries.
This paper also covers a large sample of countries, including developed, emerging, and developing economies. The author discusses the revolution in public sector thinking that is transforming the public sectors of developing and transition countries. Fiscal decentralisation, the devolution of taxing and spending powers to lower levels of government, has become important to governance in many countries. Decentralization in developing countries sometimes seems to be viewed as either a panacea or a plague either a cure for all the ills of such countries or an addition to their already heavy burdens. Fiscal decentralization in developing countries, edited by professors bird and vaillancourt and featuring important, original, and uptodate research from leading scholars, assesses the progress, problems, and potentials of. Fiscal decentralization in developing and transition. Fiscal decentralization and the efficiency of public service delivery. Fiscal decentralization can also obstruct the redistribution role of the central government. Fiscal decentralization in a for the asia foundation. Other countries indicator china developing transition oecd countries economies countries subnational share of 48 16. Fiscal decentralization and public sector efficiency.
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