scholarly journals Reviving Leviathan: Fiscal Federalism and the Growth of Government

2003 ◽  
Vol 57 (4) ◽  
pp. 695-729 ◽  
Author(s):  
Jonathan Rodden
Keyword(s):  
Government Spending ◽  
Tax Competition ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Public Expenditures ◽  
Intergovernmental Transfers ◽  
Tax Base ◽  
Local Taxation ◽  
State And Local

AbstractThis article revisits the influential “Leviathan” hypothesis, which posits that tax competition limits the growth of government spending in decentralized countries. I use panel data to examine the effect of fiscal decentralization over time within countries, attempting to distinguish between decentralization that is funded by intergovernmental transfers and local taxation. First, I explore the logic whereby decentralization should restrict government spending if state and local governments have wide-ranging authority to set the tax base and rate, especially on mobile assets. In countries where this is most clearly the case, decentralization is associated with smaller government. Second, consistent with theoretical arguments drawn from welfare economics and positive political economy, I show that governments grow faster as they fund a greater portion of public expenditures through intergovernmental transfers.

scholarly journals Fiscal Federalism in Nepal: Challenges and Opportunities

2019 ◽  
Vol 2 (1) ◽  
pp. 151-170
Author(s):  
R. K. Shah
Keyword(s):  
Natural Resources ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Resource Distribution ◽  
National Level ◽  
The State ◽  
Federal States ◽  
Challenges And Opportunities ◽  
State And Local

The Constitution of Nepal was formally promulgated and it declared the country as a Federal Democratic Republic on September 20, 2015 by the Second CA. Fiscal powers were shared among the federal government, the state governments and the local governments. The Constitution further defined the framework of fiscal federalism within the pattern of income and resource distribution. The primary objectives of this study is to review the modality presented in the new Constitution on the natural resources, economic rights and revenue allocation. The study finds that the fiscal decentralization initiatives have not been successful in minimizing the political, social, economic, regional and ethnic inequalities inherent for nearly 240 years of a unitary system of governance in Nepal. The study recommends that VAT, excise duties and income taxes have to be allocated at the federal, states and local levels in the ratio of 70 percent, 15 percent and 15 percent respectively by the Constitution. Intergovernmental transfer modality has included in the Constitution. Revenue sharing from hydropower has been a controversial issue in Nepal. National Natural Resources and Fiscal Commission (NNRFC) has been constituted at the central level to make national level development plans and to make recommendations for additional grants and loans for the state and local governments. The Constitution has further defined the framework of fiscal federalism within the pattern of income and resource distribution. The theoretical study indicates that there is various controversial and overlapping issues required clarity in process of implementation in the years to come.

scholarly journals Taxation, revenue allocation and fiscal federalism in Nigeria: Issues, challenges and policy options

2011 ◽  
Vol 56 (189) ◽  
pp. 27-50 ◽  
Author(s):  
Adeleke Salami
Keyword(s):  
Local Governments ◽  
Fiscal Federalism ◽  
Global Financial Crisis ◽  
Federal State ◽  
Tax Revenue ◽  
Tax Base ◽  
Oil Revenue ◽  
Key Issues ◽  
State And Local ◽  
The Government

Taxation is one of the most important and easy sources of revenue to any government, as the government possesses inherent power to impose taxes and levies. Nigeria tax system has been weak due largely to inadequate data of the tax base and heavy reliance on oil revenue. With the volatility in oil prices and excruciating impacts of the recent global financial crisis, taxation deserves more attention now than ever before in Nigeria. One issue that is critical to domestic resource mobilization and utilization is the issue of fiscal federalism. Nigeria operates three tiers of government; Federal, State and Local Governments with separate revenue, expenditure, and assigned responsibilities each. However, all decisions including resources are controlled from the centre and the vertical revenue allocations tilt more towards the direction of federal government, contrary to the tenets of federalism the country is practicing. Both vertical and horizontal revenue in Nigeria is engulfed in controversy. The paper presents key issues, trend and challenges of taxation and fiscal federalism in Nigeria. In addition, the paper highlights a number of suggestions that would stimulate increase in tax revenue and guarantee fiscal assignment acceptable to the federal and sub-national government.

scholarly journals The Evolutionary Paradigm of Fiscal Federalism: Transformation of the United States Experience into Ukrainian Decentralism

2021 ◽  
Vol 8 (523) ◽  
pp. 109-116
Author(s):  
A. I. Krysovatyy ◽  
◽  
F. P. Tkachyk ◽  
Keyword(s):  
United States ◽  
United States Of America ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
The United States ◽  
Public Authorities ◽  
Fiscal Autonomy ◽  
State And Local ◽  
States Experience

The modern paradigm of effective social and economic development of regions must take into consideration the dialectics of fiscal federalism in the symbiosis of its essential determinants with fiscal decentralization. The purpose of the article is to scientifically and conceptually substantiate the model of fiscal federalism of the United States of America in the field of implementation of adequate provisions into Ukrainian decentralization. The article examines the conceptual provisions of fiscal federalism, substantiates the forms of decentralization of powers among levels of government. The architectonics and evolutionary paradigm of fiscal federalism in the United States of America are covered. The risks and effects of fiscal federalism were monitored for the purposes of implementing its basic aspects into Ukrainian practice. Theories of the first and second generations of fiscal federalism are considered. It is ascertained, that the principles of fiscal federalism are used in the practice of unitary countries. Public authorities actively apply mechanisms of cooperation with municipalities in the context of delegation of tax and expenditure powers. Emphasis is placed on the tax component of the intensification of fiscal autonomy of local governments. At the same time, the experience of the United States of America has shown the importance of directing grants and transfers to social projects of municipalities. The priorities of adaptation of actual postulates of fiscal federalism into Ukrainian system of interbudgetary relations under conditions of decentralization of powers are outlined. It is emphasized that fiscal federalism should not be limited to the redistribution of financial resources between the State and local governments. It should encourage amalgamated territorial hromadas to financial autonomy and increase tax potential to improve the prosperity of citizens

Do State Sales Taxes Crowd Out Local Option Sales Taxes?

2018 ◽  
Vol 18 (3) ◽  
Author(s):  
Gregory S. Burge ◽  
Cynthia L. Rogers
Keyword(s):  
Local Governments ◽  
Sales Tax ◽  
Tax Rates ◽  
Tax Base ◽  
Tax Rate ◽  
Sales Taxes ◽  
Fiscal Externalities ◽  
Crowd Out ◽  
State And Local ◽  
Fiscal Spillovers

Abstract Currently, sales taxes are imposed at both the state and local levels in 37 US states. In these environments, vertical tax competition occurs as governments share a common sales tax base, and local jurisdictions have autonomy over sales tax rates. As cash-strapped states look to sales taxes for additional revenues, local governments may worry about potentially adverse revenue impacts, as consumers react to combined tax rate increases. This study examines state-municipal and county-municipal fiscal spillovers using an empirical approach that accounts for endogenous tax policy leadership and voter tax fatigue. Employing comprehensive longitudinal data from Oklahoma, we find that state tax hikes significantly crowd out future rate increases for the large group of jurisdictions that are designated as followers. Leader jurisdictions are not found to display crowd-out tendencies, a result that is consistent with recent work suggesting that leaders may be less influenced by vertical fiscal externalities than other jurisdictions.

scholarly journals Dampak Desentralisasi Fiskal terhadap Volatilitas Belanja Pemerintah Kabupaten/Kota di Indonesia

2019 ◽  
Vol 19 (1) ◽  
pp. 118-138
Author(s):  
Benedictus Raksaka Mahi ◽  
Syarah Siti Supriyanti
Keyword(s):  
Local Government ◽  
Government Spending ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Transparency ◽  
Before And After

The volatility of expenditures sub-local derived from central government transparency in transfers to local governments may aggravate sublocal economy. This study aims to analyze the eect of fiscal decentralization to the level of volatility of local government spending in 230 sub-local in Indonesia. We use two periods, before and after the implementation of Law No. 28 Year 2009. The regression results indicate that the volatility of local government spending may decrease if the degree of fiscal decentralization increases, especially at the time when districts implement that law. As responsive taxation can provide incentives for smooth spending for sub-local government. ================================= Volatilitas belanja pemerintah kabupaten/kota yang berasal dari ketidakpastian transfer pemerintah pusat kepada pemerintah daerah dapat memperburuk perekonomian kabupaten/kota. Penelitian ini bertujuan menganalisis pengaruh desentralisasi fiskal terhadap tingkat volatilitas belanja riil pemerintah pada 230 kabupaten/kota di Indonesia serta membandingkan data sebelum dan sesudah implementasi UU No. 28 Tahun 2009. Hasil menunjukkan semakin tinggi derajat desentralisasi fiskal, cenderung menurunkan volatilitas belanja riil pemerintah kabupaten/kota karena kemampuan fiskal kabupaten/kota cenderung meningkat setelah implementasi UU tersebut. Pajak properti merupakan sumber penerimaan daerah yang dapat diprediksi sehingga pemerintah kabupaten/kota dapat mengelola belanja daerahnya dengan lebih pasti dan terukur.

scholarly journals Interrogating the Revenue Allocation in Intergovernmental Relations, Fiscal Federalism and Local Government Finance in Nigeria

2017 ◽  
Vol 6 (2) ◽  
pp. 71
Author(s):  
Bolanle W. Shiyanbade
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Intergovernmental Relations ◽  
Good Governance ◽  
National Income ◽  
Revenue Generation ◽  
Local Council ◽  
Revenue Allocation ◽  
State And Local

This study examined the relationship between fiscal federalism, governance and local government finances in Nigeria, focusing on the administration of local governments and other subsidiary issues on revenue generation in the country. It analysed the legal, institutional and procedural mechanisms for administration, as well as assessed the effect of intergovernmental relations on local government under federal system of governance in the country. This is with a view to providing information on revenue allocation and intergovernmental relations as important elements in understanding and addressing the fiscal federalism on local council finance in Nigeria in the context of their divergent governance experiences since the fourth republic.The paper discovered that beyond the function of revenue generation or allocation, fiscal relations influenced governance positively by creating the expediency of transparency and responsiveness in government as well as a corresponding three levels of government has responsibilities and roles to play in the lives of citizenry in order to bring governance to the grassroots. However, the work found evidences of lack of fiscal autonomy and independent of local government as well as delay in local government election has resulted to poor performance of local administration in Nigeria at large. The results also revealed that a very important factor affecting the local government administration in Nigeria still remains the overbearing contribution of about 93% oil revenue to the national income; a situation that, both state and local governments in Nigeria cannot generate up to twenty five percent (25%) of their expenditure and poor tax culture amongst the citizenry. The study concluded among others that effective human resources, improved strategy, and enhanced capacity building, are critical to improved revenue generation and allocation, which in turn could go a long way to alleviating good governance in Nigeria.

scholarly journals The Impact of Alternative Distribution Formulas on the Allocation of Revenue Sharing Funds in New York State

1974 ◽  
Vol 3 (2) ◽  
pp. 124-134
Author(s):  
Harry P. Mapp
Keyword(s):  
New York ◽  
Local Governments ◽  
New York State ◽  
Federal State ◽  
Public Expenditures ◽  
Dramatic Rise ◽  
Local Government Expenditures ◽  
State And Local ◽  
The Impact

Over the past decade, a fundamental transformation has occurred in the attitudes of our citizens regarding the range, quantity and quality of services desired of all levels of government. One result has been a dramatic rise in public expenditures to provide the diverse set of services desired. For example, between 1960 and 1972, expenditures of federal, state and local governments increased from $151.3 billion to $410.3 billion, about 171 percent. Local government expenditures, which were pushed upward by expanding school enrollments and welfare caseloads, maintained their relative importance by growing from $29.0 billion to $75.4 billion, about 169 percent.

PENGARUH TRANSFER DANA PERIMBANGAN DAN DANA PENYESUAIAN TERHADAP ALOKASI BELANJA MODAL PEMERINTAH DAERAH DI INDONESIA TAHUN 2012-2014

2016 ◽  
Vol 26 (1) ◽  
pp. 24
Author(s):  
Imam Sumardjoko
Keyword(s):  
Regional Development ◽  
Local Governments ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Capital Expenditure ◽  
Research Data ◽  
P Value ◽  
Capital Spending ◽  
Fiscal Disparities

The issue of inter-regional development imbalances and fiscal disparities into the current fiscal decentralizationissues. The toughest challenge in building fiscal decentralization not only gives funds to local governments, butcreating impact of improving the quality of public services and economic growth. Transfer to the area hasincreased every year. However, this increase has not been maximized to reduce poverty, equitable distribution ofinfrastructure, fiscal gap, and competitive regional economy.Research funds for fiscal decentralization in some countries have done long before the implementation ofregional autonomy. The result will vary according to the characteristics of the area in the country. In addition toa variety of research results, the implementation of regional transfers caused disagreement. Indonesia has adiversity of characteristics and distribution of a wide area. An interesting question is whether the increase intransfers to the regions to encourage regional development through capital expenditure area.The study uses a quantitative approach that is explanatory research with two research data is local governmentthat receives DID for three consecutive years and areas that do not pay attention DID streak. Regression analysis involves five independent variables, transfer funds DAU, DAK, DBH, DID, BOS seta dependent variable is thearea of capital expenditure. The research data come from reports on realization of the budget and Transfer ToThe Financial Statements year period 2012-2014.The first test results prove DAU, DAK, DBH, and DID have a significant effect on capital spending area withprobability signifkansi each less than 0.05. These results are in line with the theory of fiscal federalism. BOSwhereas no significant effect on capital spending area with p-value of 0.379. BOS as the provision of basiceducation aid has not been able to provide flexibility to the budget to increase the use of capital expenditure. Theresults of the second test with the data local governments do not pay attention DID streak gives similarity with theresults of the first test except variable DID no significant effect on capital spending. All variables simultaneouslyaffect the area of capital expenditure.

How Government Spending on Public Sector Affect The Economic Growth?

JEJAK ◽  
2020 ◽  
Vol 13 (1) ◽  
pp. 218-229
Author(s):  
Ambya Ambya
Keyword(s):  
Economic Growth ◽  
Government Spending ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Regional Government ◽  
Analysis Model ◽  
Panel Data Regression ◽  
Data Regression ◽  
Per Capita ◽  
Autonomous Regions

Fiscal decentralization is an effort to reform governance so that it has a more effective and efficient structure so that it can improve services to the community. Efforts to achieve these goals are largely determined by the availability of human resources, natural resources, and other economic potential. The formation of New Autonomous Regions (NAR) grew rapidly, but on the other hand local governments were unable to fund development activities independently but were dependent on balance funds. The objective to be achieved is to analyze the effect of regional government spending on education, health, and infrastructure, as well as other variables namely labor on the economic growth of new autonomous regions in Indonesia. The analysis model used is panel data regression. The results of the study prove that local government spending in real per capita education, real health (lag-1) per capita, and real per capita infrastructure, and the number of workers have a positive and significant effect on economic growth. Economic growth that occurs in the district is not different from the city, so also in the base sector is mostly no different except the mining and quarrying sector.

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