Fiscal Decentralization

This project aims to answer the following question: Does fiscal decentralisation influence on economic and social development of the EU's constituent regions? For that reason, the first part will analyse the literature review regarding both political and fiscal decentralization. Secondly, the territorial organisation of the EU will be addressed in order to project the multilevel geographical structure of the territorial levels. Afterwards, the nomenclature of European regions and their territorial organisation will be analysed. After that, a quantitative analysis will be carried out through two statistical techniques using the data retrieved from the databases concerning the EU´s constituent regions (NUTS 2). The selected variables represent social indicators regarding to the first public policy objective "social and economic progress" of EU. The first analysis will address the research question, and the second one, will focus on grouping European regions based on their overall performance, paying special attention to Basque Country. In addition, an assessment of both the obtained results and the research question will be performed by different experts. To conclude, the most relevant aspects as well as the answer to the research question will be addressed.

El siguiente proyecto de investigación tiene como objetivo responder a la pregunta
¿Influye la descentralización fiscal en el desarrollo económico y social de las regiones conformantes de la Unión Europea? Para ello, en primer lugar, se realizará una revisión del Estado del Arte de la descentralización política y la descentralización fiscal. En segundo lugar, se abordará la organización territorial de la Unión Europea para poder proyectar la estructura multinivel geográfica de los niveles territoriales de la UE para posteriormente analizar la nomenclatura de las regiones europeas en base a su organización territorial. Más adelante, se realizará un análisis cuantitativo a través de dos técnicas estadísticas haciendo uso de los datos obtenidos de las bases de datos referentes a las regiones conformantes de la Unión Europea (NUTS 2). Las variables seleccionadas representan los indicadores sociales referentes al primer objetivo de las políticas públicas “progreso social y económico” que abarca la Unión Europea. El primer análisis abordará la pregunta de investigación, y el segundo análisis se centrará en agrupar las regiones europeas en base a sus resultados globales, poniendo el foco en Euskadi. Además, se realizará una valoración de los resultados obtenidos y de la cuestión a analizar por parte de diferentes expertos. Finalmente, se abordarán las conclusiones más relevantes, cuyo propósito es dar respuesta a la pregunta de investigación.

This book presents an in-depth analysis of key recommendations of the consecutive state finance commissions (SFCs) across states of India in the local and national perspective. It reviews the working of SFCs and their critical role in strengthening local governments, both Panchayats and municipalities in the various states. The volume attempts to identify some of the emerging issues related to the efficacy of SFC in fiscal decentralization. It appraises nearly eighty SFC reports and actions taken thereon by the respective State Governments with contextual analysis. Please see the link https://www.palgrave.com/gp/book/9789811622021#

The study attempts to document the Philippine’s experience in health devolution with focus on the Department of Health’s efforts to make it work. It also aims to draw lessons and insights that are critical in assessing the country’s decentralization policies and also, in informing future policymaking. In particular, it highlights the importance of (i) a well-planned and well-designed government policy to minimize, if not avert, unintended consequences; and (ii) mainstreaming of health policy reforms to ensure sustainability. It suggests the need to (i) take
a closer look at the experience of local government units (LGUs) that were able to reap the benefits of health devolution and find out how the good practices can be replicated in other LGUs; and (ii) review and assess the various health reforms and mechanisms that have been in
place to draw lessons and insights that are useful for crafting future health policies.

Özet
Osmanlı İmparatorluğu'nun adem-i merkeziyetçilik dönemi 17. yüzyılda başlamış ve 18. yüzyılda zirveye çıkmıştır. Bu çalışmada ilgili dönemde sermaye sahibi olan ayanların sermayelerini nasıl değerlendirdikleri incelenmektedir. Bu sebeple ayanlığın tarihsel süreçte hangi köşe taşları vasıtasıyla ihdas olunduğu üzerine durulmuş ve ekonomi literatüründeki girişimci (kapitalist) tanımının bu sınıf için ne kadar uygun olduğu belirlenmeye çalışılmıştır. Ancak girişimci bir sınıfın gelişmesini sağlayan gerekli temel şartların oluşmadığı sonucuna ulaşılmıştır. Bununla birlikte ayanlar tipik bir girişimci gibi yalnızca kar etmek kaygısında olmamış, aynı zamanda taşrada siyasi nüfuzlarını artırmaya çalışan birer güç odağı gibi davranmışlardır.

Annotation
After regaining the independence, Georgia had to undertake multiple systemic changes during the transformation period. The process has lasted more than 25 year by now with some success. One of the most complicated dimensions turned out to be the administrative-territorial reform. The initial hindrance in it was declaration of self-proclaimed states by the separatist forces in the regions of Georgia, and later, after five-day Russia-Georgia war, recognition of these regions as states by Russian Federation in 2008.
Current Constitution of Georgia (1995) determined that “state-territorial arrangement of Georgia will be stipulated by the constitutional Law based on the principle of separation of powers after regaining the jurisdiction by Georgia on whole territory of the country (art.2, para 3.).
After Russian-Georgian war in 2008, Russian Federation expanded territory beyond previous separatist regions by additionally occupying Akhalgori Municipality and Azhara Municipality. This situation made Constitutional provision even more strict and complicated, though it is impossible to execute statehood without territorial arrangement.
After recuperating independence, the steps have been made toward decentralization and deconcentration of powers. On different stages the changes made were contradictory. Though in 2004, after ratifying “European Charter on Local Self-Governance” the process of decentralization gained clearer framework for development. Of course this fact can’t prevent time waste but can ensure that the process initiated can’t be reversed.
The LSG reform based on decentralization and deconcentration concepts is still active and includes regional development issues as well. The paper addresses the issue of regionalization policy and tries to analyze the reasons for delays to introduce regional governance one of which is the lack of hereditary principle when there is next power shift in the country and starting all over again.
The lack of theoretical elaboration of these issues and different understanding of region and regionalization is of crucial importance for smoother process. The main supposition is to equal the regionalization with separatism, which is enforced by the forces fighting for the federalization of Georgia as they are trying to implement it through regionalization. The Paper focuses on rich European experience to implement regionalization that can be implemented both in unitary as well as federal states.
The author supports establishment of Development Regions which based on European regionalization concept can give country opportunities to explore and use the unexplored capacities of economic growth and development. For this purpose the importance of real local self-governance is underscored for the success of regionalization. The issues are discussed in historic and logical order. The story of latest “Code on LSG” is been analyzed, that hugely influenced its final content and first results of the Code implementation is discussed.
The author supports development of two-level self-government but on local, not regional level. But main focus should be ensuring current LSG units with proper financial resources to its own competences and for this purpose, creation of sustainable financial-economic basis for local authorities and ceasing full dependence on central authorities as it is up to date.
The vision for establishment of Development Regions is discussed in the prism of current Association with European Union which should make Regional Development Strategy from formal paper into real development tool through its Action Plan. The Paper contains conclusions and recommendations.

საქართველო-ევროკავშირის ასოცირების დღის წესრიგით, უახლოესი სამი წლის განმავლობაში, პრიორიტეტულია დეცენტრალიზაციის სტრატეგიის განხორციელება „ადგილობრივი თვითმმართველობის შესახებ ქარტიის“ შესაბამისად, აგრეთვ ადგილობრივი თვითმმართველობის გაძლიერება ევროპული სტანდარტების შესაბამისად. ეს არის
გამოწვევა, რომლის წარმატებით განხორციელება განაპირობებს როგორც რეალური თვითმმართველობის სისტემის შექმნას და გადაწყვეტილებათა მიღების პროცესში დემოკრატიული ჩართულობის გაზრდას, ასევე საქართველოს ევროკავშირთან
ინტერგრაციას და დემოკრატიულ სახელმწიფოთა ოჯახში ღირსეულ პარტნიორად დამკვიდრებას.

developmental inequalities among the regions. The national government’s weaknesses in foreign policy and protection of human rights also weaken federalism’s promises of unity-in-diversity and democratic peace. The author concludes that Federalism is a goal to aim for only after provisions for devolution in the current constitution have been maximized, and safeguards for human rights and national sovereignity are restored.

Tests for the presence of Leviathan, evidenced by a positive relationship between the size of government measured as a percentage of GDP, and the degree of fiscal centralization, have provided mixed results. We derive alternative measures of the size of government taking into account household and informal market activity. Traditional Leviathan models are then re-estimated for an international sample of forty-five countries. Controlling for income, population, intergovernmental grants, and urbanization we test whether fiscal centralization is responsible for the relative size of government. We find no evidence of a relationship between fiscal centralization and government size.

The growth of Africa's towns and cities has outpaced local authority capacity in terms of management, infrastructure, and financing. Many African towns and cities are now facing a governance crisis. Accordingly, the capability and capacity of urban local government to provide basic services to a growing population have entered the core of the development debate. In particular, fiscal decentralization -

A Two-way Causality Between Local Government Tax Revenue and Economic Growth Variables on the Basis of Fiscal Decentralization and Fiscal Equalization: Some Fiscal Autonomy Analyses for the Selected OECD Countries

This study examines the existence and direction of the panel causality between different fiscal decentralization and economic growth variables. The well-known theoretical and empirical literature has assumed that the fiscal decentralization process somehow causes economic growth, but has mostly ignored the possibility of economic growth can cause and change the decentralization levels as well. With its different point of interest, methodology and samples; the study applies the Bootstrap Panel Granger Causality Test to the data from 18 countries between 1991-2015 and finds that both fiscal decentralization and economic growth causes each other in different countries with relatively significant levels. According to the results, the tested variables of fiscal decentralization cause GDP and GDP per capita growth in Canada, France and Japan while in Hungary, Poland and Australia "vice versa" effect happens. Further to that, some fiscal policy assessments are also done as a conclusion for the countries (like Turkey) which fiscal decentralization has no or less effect in either way.

The study attempts to document the Philippine’s experience in health devolution with focus on the Department of Health’s efforts to make it work. It also aims to draw lessons and insights that are critical in assessing the country’s decentralization policies and in informing future policymaking. It particularly highlights the importance of (1) a well-planned and well-designed government policy to minimize, if not avert, unintended consequences; and (2) mainstreaming of health policy reforms to ensure sustainability. It suggests the need to (1) take a closer look at the experience of local government units (LGUs) that were able to reap the benefits of health devolution and find out how the good practices can be replicated in other LGUs and (2) review and assess the various health reforms and mechanisms that have been in place to draw lessons and insights that are useful for crafting future health policies.

This brief presents an overview of the evolution of local government finance in Albania over the past decade. It has two central purposes. The first is to examine changes in the financial position of local governments since the 2014 passage of the Law on Territorial and Administrative Division. This law consolidated 373 local governments (67 municipalities, 306 communes) into 61 larger municipalities. The second is to highlight some of the changes and challenges that will accompany the implementation of the 2017 Law on Local Government Finance (LGFL).

The first section of the Brief, tracks the evolution of local government finance in Albania over the last 10 years, paying particular attention to the changes that have occurred since territorial consolidation and the passage of the new Law on Local Self-Government. Where possible and appropriate it compares the revenue and expenditure of Albanian local governments with their counterparts in the region. In the concluding sections, the Brief presents some simulations of the major financial changes that can be expected to accompany the implementation of the LGFL as well as some of the challenges that need to be addressed to consolidate the reforms.

The quest of searching the endogeny variables of financial decentralization in emerging markets have become a serious topic due to the increasing wave of decentralized regions in many countries. The paper aims to examine the effects of fiscal decentralization and specific local autonomy on economic growth, employment, poverty, and welfare in the special province Papua (Indonesia). The study exploited the main data of the decentralization fund by using a panel data of eight regencies and municipals, particularly the regional autonomy fund, direct and indirect government expenditure, and economic growth. The paper used the path analysis to explore the relationships of the observed variables. The results revealed that the decentralization fund influenced significantly on government’s direct expenditure and economic growth. The special local autonomy's fund has influenced considerably on government’s indirect expenditure. Its effect has increased, through economic growth as the inter-mediating variable, meaningfully on employment, poverty, and welfare. The results are in line with the prior studies, which explore the consequences of decentralization and specific autonomy to spur the economic growth in certain regions. It implies that the economic development strategies in Indonesia’s less-developed regions should be started with a bigger autonomy transfer program to those regions and simultaneously enhanced it by
special budget allocation to trigger and support the development.

While strong arguments can be made that improved local governance and decentralization will contribute to more efficient public services and greater economic growth, this view is not universally shared within the development community. In fact, the academic research on the role of the local public sector has been unable to confirm to what extent (or under what conditions) a greater degree of decentralization results in better development outcomes. In order to fill this void in the state of knowledge, the current study engages in an empirical stock-taking exercise—based on data from 29 developing and transition countries—to assess the contribution of local governments, and the local public sector more broadly, to achieving the global development goals.