Local Financial Autonomy in Theory and Practice: The Impact of Fiscal Decentralisation in Hungary


Book Description

Although financial autonomy is a recurrent notion in the literature on fiscal federalism and decentralisation, it has seldom been the focus of scientific analysis. This book explores the meaning of financial autonomy at subnational levels of government, its relationship with the principle of subsidiarity, as well as its impact on the three economic branches of government activity: allocation, distribution, and stabilisation. The major contribution of the book is a structured overview of the factors that may potentially impinge on the freedom of subnational authorities with regard to their budget decisions. This analytical tool may help pave the way towards the elaboration of more accurate techniques for measuring subnational financial autonomy in future. A tentative application of the new theoretical framework is provided in the second part of the book that delves into the complex issues of municipal revenue and expenditure autonomy in Hungary after 1990.




Fiscal Decentralization and the Efficiency of Public Service Delivery


Book Description

This paper explores the impact of fiscal decentralization on the efficiency of public service delivery. It uses a stochastic frontier method to estimate time-varying efficiency coefficients and analyzes the impact of fiscal decentralization on those efficiency coefficients. The findings indicate that fiscal decentralization can improve the efficiency of public service delivery but only under specific conditions. First, the decentralization process requires adequate political and institutional environments. Second, a sufficient degree of expenditure decentralization seems necessary to obtain favorable outcomes. Third, decentralization of expenditure needs to be accompanied by sufficient decentralization of revenue. Absent those conditions, fiscal decentralization can worsen the efficiency of public service delivery.




Democratic Governance and Political Participation in Nigeria 1999 - 2014


Book Description

The year 1999 was a watershed in the history of Nigeria as it witnessed the peaceful transfer of power from the military to the political class. Given Nigerias tumultuous history of successive military interventions, this development was the first genuine transition that saw the military elite transferring political power to civilians without itching to stage a comeback. This edited volume, composed of 22 chapters discusses the form, trajectory and substance of democratic governance in post-military Nigeria between 1999 and 2014. It is a compilation of well researched essays and narratives on Nigerian government and politics. The book is a multi-disciplinary assessment of Nigerias democratic strides, including contributions from scholars in a broad range of disciplines such as history, sociology and anthropology, political science, economics, international relations, among others. The book examines the factors responsible for the resilience of the current democratic governance structures, in spite of centripetal and centrifugal forces frustrating democratic consolidation in the country. It equally interrogates these factors and makes appropriate recommendations for overcoming them. Key themes covered in the book in the Boko Haram insurgency, governance and corruption, militancy, sharia law, Islamic banking amongst others. It sheds light on contending issues affecting, afflicting and retarding the countrys progress. Issues like ethnicity, electoral corruption, human rights abuses, privatization of national assets, kidnapping and armed robbery, overbearing leadership personality and many more are critically discussed. Local government autonomy and the challenges of grassroots development and civil service administration are also thoroughly analysed. Democratic Governance and Political Participation in Nigeria 1999-2014 is a detailed, exhaustive, deep, stimulating and captivating narrative of the Nigerian situation. It is enthusiastically recommended for those who wish to know more about contemporary Nigerian history. As a collection of contemporary issues on the Nigerian government and politics, the book is recommended for courses in politics and governance in Nigeria in particular and Africa in general. It is an invaluable companion for both graduate and undergraduate students as well as scholars of African politics.




Lessons for Effective Fiscal Decentralization in Sub-Saharan Africa


Book Description

Fiscal decentralization is becoming a pressing issue in a number of countries in sub-Saharan Africa, reflecting demands for a greater local voice in spending decisions and efforts to strengthen social cohesion. Against this backdrop, this paper seeks to distill the lessons for an effective fiscal decentralization reform, focusing on the macroeconomic aspects. The main findings for sub-Saharan African countries that have decentralized, based on an empirical analysis and four case studies (Kenya, Nigeria, South Africa, Uganda), are as follows: • Determinants and effectiveness: Empirical results suggest that (1) the major driving forces behind fiscal decentralization in sub-Saharan Africa include efforts to defuse ethnic conflicts, the initial level of income, and the urban-ization rate, whereas strength of democracy is not an important determi-nant for decentralization; and (2) decentralization in sub-Saharan Africa is associated with higher growth in the presence of stronger institutions. • Spending assignments: The allocation of spending across levels of gov-ernment in the four case studies is broadly consistent with best practice. However, in Uganda, unlike in the other three case studies, subnational governments have little flexibility to make spending decisions as a result of a deconcentrated rather than a devolved system of government. • Own revenue: The assignment of taxing powers is broadly in line with best practice in the four case studies, with the bulk of subnational revenue coming from property taxes and from fees for local services. However, own revenues are a very small fraction of subnational spending, reflecting weak cadaster systems and a high level of informality in the economy.




Fiscal Federalism in Latin America


Book Description

This text helps Latin American policymakers meet the challenge of decentralization to improve public sector performance at all levels of government by appropriately assigning jurisdiction over public goods, services, tax authority and user charges.




Financing Metropolitan Governments in Developing Countries


Book Description

The economic activity that drives growth in developing countries is heavily concentrated in cities. Catchphrases such as “metropolitan areas are the engines that pull the national economy” turn out to be fairly accurate. But the same advantages of metropolitan areas that draw investment also draw migrants who need jobs and housing, lead to demands for better infrastructure and social services, and result in increased congestion, environmental harm, and social problems. The challenges for metropolitan public finance are to capture a share of the economic growth to adequately finance new and growing expenditures and to organize governance so that services can be delivered in a cost-effective way, giving the local population a voice in fiscal decision making. At the same time, care must be taken to avoid overregulation and overtaxation, which will hamper the now quite mobile economic engine of private investment and entrepreneurial initiative. Metropolitan planning has become a reality in most large urban areas, even though the planning agencies are often ineffective in moving things forward and in linking their plans with the fiscal and financial realities of metropolitan government. A growing number of success stories in metropolitan finance and management, together with accumulated experience and proper efforts and support, could be extended to a broader array of forward-looking programs to address the growing public service needs of metropolitan-area populations. Nevertheless, sweeping metropolitan-area fiscal reforms have been few and far between; the urban policy reform agenda is still a long one; and there is a reasonable prospect that closing the gaps between what we know how to do and what is actually being done will continue to be difficult and slow. This book identifies the most important issues in metropolitan governance and finance in developing countries, describes the practice, explores the gap between practice and what theory suggests should be done, and lays out the reform paths that might be considered. Part of the solution will rest in rethinking expenditure assignments and instruments of finance. The “right” approach also will depend on the flexibility of political leaders to relinquish some control in order to find a better solution to the metropolitan finance problem.




Decentralization and Service Delivery


Book Description

Dissatisfied with centralized approaches to delivering local public services, a large number of countries are decentralizing responsibility for these services to lower-level, locally elected governments. The results have been mixed. The paper provides a framework for evaluating the benefits and costs, in terms of service delivery, of different approaches to decentralization, based on relationships of accountability between different actors in the delivery chain. Moving from a model of central provision to that of decentralization to local governments introduces a new relationship of accountability-between national and local policymakers-while altering existing relationships, such as that between citizens and elected politicians. Only by examining how these relationships change can we understand why decentralization can, and sometimes cannot, lead to better service delivery. In particular, the various instruments of decentralization-fiscal, administrative, regulatory, market, and financial-can affect the incentives facing service providers, even though they relate only to local policymakers. Likewise, and perhaps more significantly, the incentives facing local and national politicians can have a profound effect on the provision of local services. Finally, the process of implementing decentralization can be as important as the design of the system in influencing service delivery outcomes.




The Political Economy of Democratic Decentralization


Book Description

Nearly all countries worldwide are now experimenting with decentralization. Their motivation are diverse. Many countries are decentralizing because they believe this can help stimulate economic growth or reduce rural poverty, goals central government interventions have failed to achieve. Some countries see it as a way to strengthen civil society and deepen democracy. Some perceive it as a way to off-load expensive responsibilities onto lower level governments. Thus, decentralization is seen as a solution to many different kinds of problems. This report examines the origins and implications decentralization from a political economy perspective, with a focus on its promise and limitations. It explores why countries have often chosen not to decentralize, even when evidence suggests that doing so would be in the interests of the government. It seeks to explain why since the early 1980s many countries have undertaken some form of decentralization. This report also evaluates the evidence to understand where decentralization has considerable promise and where it does not. It identifies conditions needed for decentralization to succeed. It identifies the ways in which decentralization can promote rural development. And it names the goals which decentralization will probably not help achieve.




Fiscal Decentralization Reforms


Book Description

This book examines the impacts of fiscal decentralization reforms on the efficiency of local governments in Central and Eastern European (CEE) countries. By offering a comparative perspective and by applying econometric methods and regression models, it analyses various reform trajectories and their effects on individual CEE countries. Furthermore, the book discusses input and output indicators for evaluating the efficiency of municipalities. Readers will learn about the common features of these countries, the impact of path dependence, and future prospects for decentralization reforms. In closing, the book discusses modern management and administration methods, opportunities for cooperation between municipalities, co-creative service delivery, and other measures that could improve the efficiency of public service provision.




The Oxford Handbook of Local and Regional Democracy in Europe


Book Description

The Oxford Handbook of Local and Regional Democracy in Europe analyses the state of play of democracy at the subnational level in the 27 member states of the EU plus Norway and Switzerland. It places subnational democracy in the context of the distinctive Anglo, the French, the German and Scandinavian state traditions in Europe asking to what extent these are still relevant today. The Handbook adapts Lijphart's theory of democracy and applies it to the subnational levels in all the country chapters. A key theoretical issue is whether subnational (regional and local) democracy is derived from national democracy or whether it is legitimate in its own right. Besides these theoretical concerns it focuses on the practice of democracy: the roles of political parties and interest groups and also how subnational political institutions relate to the ordinary citizen. This can take the form of local referendums or other mechanisms of participation. The Handbook reveals a wide variety of practices across Europe in this regard. Local financial systems also reveal a great variety. Finally, each chapter examines the challenges facing subnational democracy but also the opportunities available to them to enhance their democratic systems. Among the challenges identified are: Europeanization, globalization, but also citizens disaffection and switch-off from politics. Some countries have confronted these challenges more successfully than others but all countries face them. An important aspect of the Handbook is the inclusion of all the countries of East and Central Europe plus Cyprus and Malta, who joined the EU in 2004 and 2007. This is the first time they have been examined alongside the countries of Western Europe from the angle of subnational democracy.