Public Investment Choices by Local and Central Governments

Abstract This paper examines the impacts of devolving authority for public resource allocation to local governments in a setting of limited electoral control. Such a setting differs from that assumed by seminal formal models of devolution, but describes many developing countries. This study presents a formal model of this setting and tests it using unique data from a natural experiment in rural Ethiopia whereby half of the country's regions were decentralized but not the other half. Employing a spatial regression discontinuity design, this article shows that decentralization strongly improved delivery of agricultural public services, which are of high priority to the central government. In contrast, it did not impact drinking water services, on which the central government places lower priority but citizens place high priority.

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The Persistent Effects of Place-Based Policy: Evidence from the West-German Zonenrandgebiet

American Economic Journal Economic Policy ◽

10.1257/pol.20160395 ◽

2018 ◽

Vol 10 (4) ◽

pp. 344-374 ◽

Cited By ~ 13

Author(s):

Maximilian v. Ehrlich ◽

Tobias Seidel

Keyword(s):

Economic Activity ◽

Local Governments ◽

Natural Experiment ◽

Public Investment ◽

Spatial Regression ◽

Regression Discontinuity Design ◽

Tax Base ◽

Agglomeration Externalities ◽

Land Rents ◽

Economic Density

Using a natural experiment, we show that temporary place-based subsidies generate persistent effects on economic density. The spatial regression discontinuity design controls for continuous local agglomeration externalities, so we attribute an important role to capital formation in explaining persistent spatial patterns of economic activity. This persistence is driven by higher local public investment levels, which local governments could maintain after the end of the program because of a persistently higher tax base. We also find evidence for significant local relocation of economic activity, which raises doubts that the net effect of the policy is positive. Finally, we show that transfers have capitalized in land rents such that pretreatment landowners have benefited from the program. (JEL H71, H76, O18, R11, R12, R51, R58)

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Economic Assistance, Central–Local Relations, and Ethnic Regions in China's Authoritarian Regime

Japanese Journal of Political Science ◽

10.1017/s1468109912000369 ◽

2013 ◽

Vol 14 (1) ◽

pp. 97-125 ◽

Cited By ~ 3

Author(s):

STAN HOK-WUI WONG ◽

HIROKI TAKEUCHI

Keyword(s):

Local Governments ◽

Central Government ◽

Formal Model ◽

Economic Benefits ◽

Authoritarian Regime ◽

Political Support ◽

Political Accountability ◽

Economic Assistance ◽

Unequal Distribution ◽

Political Decentralization

AbstractWhen a central government deals with local demands, it may strengthen political accountability of the local governments by political decentralization or offer benefits through economic assistance. An authoritarian regime uses economic assistance policy because political decentralization may contradict regime survival. Although economic benefits can be used to buy political support, the distribution of these benefits is seldom equal. We argue that the unequal distribution is more salient in regions where ethnic minorities reside because the unusual demographic composition of those areas make it difficult for the national government to evaluate the performance of the local government who is responsible for the distribution of the economic benefits. As a result, economic assistance may backfire in ethnic regions and intensify their existing conflicts. We develop a simple formal model to illustrate our arguments and explore the cases of Xinjiang and Hong Kong for empirical analysis.

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The Choice of Local Governments under Two Principals: The Case of Tax Hike Policy of South Korea Noncompliance of Local Governments to Tax Hike Policy

Korean Journal of Policy Studies ◽

10.52372/kjps23108 ◽

2008 ◽

Vol 23 (1) ◽

pp. 181-207

Author(s):

Kim Dae Jin

Keyword(s):

Institutional Change ◽

Local Governments ◽

Central Government ◽

Formal Model ◽

Property Tax ◽

Short Term ◽

Seoul Metropolitan Area ◽

Form Model ◽

Long Term Prediction ◽

Tax Cuts

The Korean central government introduced a package of tax hikes on real estate in order to achieve tax levy equity. This remarkable tax innovation, however, resulted in conflicts between the cnetral government, residents, and local governments, which were followed by area-wide tax competitions among the local governments in the Seoul Metropolitan Area (SMA). This study analyzes the property tax resistance of the SMA using the form model approach to the principal and agent. It is assumed in the study that residents, local governments, and the central government have a divided principal-agent relationship. With several descriptive analyses and some data for the case, however, the theoretical model gives a logical explanation for the behaviors of residents, local governments, and the central government in the short-term tax resistance. That is, under short-term conditions, local governments tend to respond to residents' request for tax cuts, dependent upon their fiscal independence and neighboring local jurisdictions' decision-making on property tax cuts. The pattern of the property tax cuts over time implies that local government's elected officials may be very sensitive to their re-election. Further, it provides long-term prediction for the behavior of the three actors, dependent upon institutional change. When the information on institutional change is perfect, or the uncertainty is removed in the institutional change, they ultimately reaach the Nash equilibrium. Finally, it is fair to say that the formal model contributes to this study by complementing the lack of empirical data/precedent literatures, and clarifies the causality between the factors of interest.

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OPTIMALISASI PERAN PEMDA DALAM MENGATASI KENDALA PELAKSANAAN KONSERVASI KEANEKARAGAMAN HAYATI DI DAERAH (STUDI KASUS PROVINSI BENGKULU)

Jurnal Good Governance ◽

10.32834/gg.v15i2.121 ◽

2020 ◽

Vol 15 (2) ◽

Author(s):

Antung Deddy Radiansyah

Keyword(s):

Local Government ◽

Biodiversity Conservation ◽

Local Governments ◽

Central Government ◽

Wild Plants ◽

Regional Government ◽

Conservation Areas ◽

Conservation Area ◽

Conservation Policies

Gaps in biodiversity conservation management within the Conservation Area that are the responsibility of the central government and outside the Conservation Areas or as the Essential Ecosystems Area (EEA) which are the authority of the Regional Government, have caused various spatial conflicts between wildlife /wild plants and land management activities. Several obstacles faced by the Local Government to conduct its authority to manage (EEA), caused the number and area of EEA determined by the Local Government to be still low. At present only 703,000 ha are determined from the 67 million ha indicated by EEA. This study aims to overview biodiversity conservation policies by local governments and company perceptions in implementing conservation policies and formulate strategies for optimizing the role of Local Governments. From the results of this study, there has not been found any legal umbrella for the implementation of Law number 23/ 2014 related to the conservation of important ecosystems in the regions. This regulatory vacuum leaves the local government in a dilemma for continuing various conservation programs. By using a SWOT to the internal strategic environment and external stratetegic environment of the Environment and Forestry Service, Bengkulu Province , as well as using an analysis of company perceptions of the conservation policies regulatary , this study has been formulated a “survival strategy” through collaboration between the Central Government, Local Governments and the Private Sector to optimize the role of Local Government’s to establish EEA in the regions.Keywords: Management gaps, Essential Ecosystems Area (EEA), Conservation Areas, SWOT analysis and perception analysis

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Asymmetrical Attribution of Performance in China

Asian Survey ◽

10.1525/as.2020.60.5.978 ◽

2020 ◽

Vol 60 (5) ◽

pp. 978-1003

Author(s):

Jacqueline Chen Chen ◽

Jun Xiang

Keyword(s):

Economic Development ◽

Local Governments ◽

Central Government ◽

Cultural Theory ◽

Political Trust ◽

Mediation Model ◽

Multilevel Mediation ◽

Dual Pathway ◽

Underlying Mechanisms ◽

The Impact

Existing studies of the impact of economic development on political trust in China have two major gaps: they fail to explain how economic development contributes to the hierarchical trust pattern, and they do not pay enough attention to the underlying mechanisms. In light of cultural theory and political control theory, we propose adapting performance theory into a theory of “asymmetrical attribution of performance” to better illuminate the case of China. This adapted theory leads to dual pathway theses: expectation fulfillment and local blaming. Using a multilevel mediation model, we show that expectation fulfillment mainly upholds trust in the central government, whereas local blaming undermines trust in local governments. We also uncover a rural–urban distinction in the dual pathway, revealing that both theses are more salient among rural Chinese.

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Current Status of Traditional Korean Medicine Services in Public Sector: A Study for Integrating Traditional Korean Medicine into Community Care System

Healthcare ◽

10.3390/healthcare9050493 ◽

2021 ◽

Vol 9 (5) ◽

pp. 493

Author(s):

Soo-Hyun Sung ◽

Minjung Park ◽

Jihye Kim ◽

Sun-Woo Jeon ◽

Angela Dong-Min Sung ◽

...

Keyword(s):

Local Governments ◽

Community Care ◽

Central Government ◽

The Elderly ◽

Current Status ◽

Traditional Korean Medicine ◽

Korean Medicine ◽

Service Programs ◽

Care Systems ◽

Care System

Korea is currently executing a pilot program for community care of its aging population and aims to implement community care systems on a national scale by 2025. This study examines the traditional Korean medicine (TKM) service to be provided within community care by understanding the current status of TKM services. The Ministry of Health and Welfare (MoHW) sent official letters to 242 local governments (cities, districts, and counties) from October to November 2019 to survey the status of the public TKM services provided in 2018. The items of the survey included basic demographic information as well as information that could reveal how the program was implemented. In 112 local government jurisdictions (response rate 46.3%), a total of 867 TKM service programs were in place. As a result of the survey, it was revealed that they did not have any service manuals or evaluation results. To provide home-care-based TKM service for the elderly as an integrated part of a community care system, it is necessary to develop, distribute, and evaluate a standard service manual including an evaluation index by the central government.

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Public Policy Analysis on Watershed Governance in Indonesia

Sustainability ◽

10.3390/su13126615 ◽

2021 ◽

Vol 13 (12) ◽

pp. 6615

Author(s):

Tri Sulistyaningsih ◽

Achmad Nurmandi ◽

Salahudin Salahudin ◽

Ali Roziqin ◽

Muhammad Kamil ◽

...

Keyword(s):

Local Governments ◽

Central Government ◽

Good Governance ◽

Institutional Arrangement ◽

Future Research ◽

Research Approach ◽

Regional Government ◽

Government Regulations ◽

Institutional Control ◽

Watershed Governance

This paper, which is focused on evaluating the policies and institutional control of the Brantas River Basin, East Java, Indonesia, aims to review government regulations on watershed governance in Indonesia. A qualitative approach to content analysis is used to explain and layout government regulations regarding planning, implementation, coordination, monitoring, evaluation, and accountability of the central and local governments in managing the Brantas watershed, East Java, Indonesia. Nvivo 12 Plus software is used to map, analyze, and create data visualization to answer research questions. This study reveals that the management regulations of the Brantas watershed, East Java, Indonesia, are based on a centralized system, which places the central government as an actor who plays an essential role in the formulation, implementation, and accountability of the Brantas watershed management. In contrast, East Java Province’s regional government only plays a role in implementing and evaluating policies. The central government previously formulated the Brantas watershed. This research contributes to strengthening the management and institutional arrangement of the central government and local governments that support the realization of good governance of the Brantas watershed. Future research needs to apply a survey research approach that focuses on evaluating the capacity of the central government and local governments in supporting good management of the Brantas watershed.

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Transfer-based decentralisation, economic growth and spatial inequality: Evidence from China’s 2002–2003 tax sharing reform

Urban Studies ◽

10.1177/0042098019856780 ◽

2019 ◽

Vol 57 (4) ◽

pp. 806-826

Author(s):

Fan Fan ◽

Ming Li ◽

Ran Tao ◽

Dali Yang

Keyword(s):

Economic Growth ◽

Local Governments ◽

Central Government ◽

Value Added ◽

Spatial Inequality ◽

Variable Approach ◽

Interregional Inequality ◽

Urban Rural ◽

Per Capita ◽

Tax Sharing

China has adopted a transfer-based fiscal decentralisation scheme since the mid-1990s. In the 1994 tax sharing reform, the central government significantly raised its share of government revenue vis-à-vis local governments by taking most of the newly created value-added tax on manufacturing. One aim for the adoption of the transfer-based fiscal scheme was to channel more funds to less developed regions and rural areas, and to alleviate growing interregional inequality and urban–rural income disparity. In 2002 and 2003 the Chinese central government further grabbed 50% and 60%, respectively, of the income taxes previously assigned only to local governments while providing more fiscal transfers to the country’s poor regions and the countryside. Utilising the 2002–2003 change in China’s central–local tax sharing regime as an exogenous policy shock, we employ a Simulated Instrumental Variable approach to causally evaluate the effects of the policy shock on growth, interregional inequality and urban–rural disparity. We find the lower local tax share dis-incentivised local governments and led to lower growth. Although higher central transfers helped to reduce interregional inequalities in per capita GDP and per capita income, the equalising effects were only present for urban incomes. We argue that transfer-based decentralisation without bottom-up accountability was detrimental to economic growth and had limited impact on income redistribution.

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Does the “Miracle Drug” of Environmental Governance Really Improve Air Quality? Evidence from China’s System of Central Environmental Protection Inspections

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph16050850 ◽

2019 ◽

Vol 16 (5) ◽

pp. 850 ◽

Cited By ~ 8

Author(s):

Ruxin Wu ◽

Piao Hu

Keyword(s):

Air Pollution ◽

Air Quality ◽

Environmental Protection ◽

Treatment Effect ◽

Local Governments ◽

Environmental Governance ◽

Central Government ◽

Local Officials ◽

The Media ◽

Positive Effect

Central environmental protection inspections have completed their goal of full coverage of 31 provinces in China, and more than 17,000 officials have been held accountable. The media has evaluated the effectiveness of central environmental protection inspections using the notions of “instant results” and the “miracle drug of environmental governance.” Can this approach effectively promote local environmental governance? This paper takes the treatment effect of central environmental protection inspections on air pollution as an example. Using the method of regression discontinuity, central environmental protection inspections are found to have a positive effect on the air quality index (AQI), but this effect is only short term and unsustainable. Additionally, there are inter-provincial differences. Judging from the research results on sub-contaminants, the treatment effect of central environmental protection inspections on air pollution is mainly reflected in PM10, PM2.5 and CO. Under the current situation in which PM10 and PM2.5 are the main assessment indexes, this phenomenon indicates that due to the political achievements and promotion of local officials and for reasons of accountability, it is more effective for the central government to conduct specific environmental assessments through local governments than to conduct central environmental protection inspections.

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Rising Central Spending on Public Security and the Dilemma Facing Grassroots Officials in China

Journal of Current Chinese Affairs ◽

10.1177/186810261304200204 ◽

2013 ◽

Vol 42 (2) ◽

pp. 79-109 ◽

Cited By ~ 18

Author(s):

Yue Xie

Keyword(s):

Social Order ◽

Local Governments ◽

Central Government ◽

Public Security ◽

Social Stability ◽

Social Instability ◽

Grassroots Level

In response to worsening social instability in China, among grassroots communities in the poorer central and western provinces in particular, the Chinese central government has made budgetary arrangements, since 2003, to increase investment at the grassroots level to improve the capacity of local governments to maintain social order. However, this action by central government has created a dilemma for local cadres: how to perform their duty to maintain social stability while also balancing a heavy fiscal burden caused in part by the receipt of insufficient additional budgetary subsidies from higher government. This paper is an account of and an analysis of how local cadres in China perform their official duties when faced with this dilemma.

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