Using game theory to stimulate provision of local public facilities

2017 ◽  
Vol 35 (4) ◽  
pp. 368-379 ◽  
Author(s):  
Asle A. Gauteplass ◽  
Arnt O. Hopland
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Content Type ◽  
Theoretical Concepts ◽  
Local Public Services ◽  
Public Facilities ◽  
Selection Framework ◽  
The Individual ◽  
Almost All

Purpose The purpose of this paper is to study how the central government can use well-known game-theoretical concepts in order to stimulate provision of local public facilities. Design/methodology/approach The authors use the classical adverse selection framework to discuss how the central government can use investment transfers as efficiently as possible to stimulate increased provision of local public facilities. Findings The benefits of local public facilities, such as kindergartens, schools, and primary healthcare institutions are greater than what each local government takes into account. Consequently, the central government, which maximizes social welfare in total, wants more local public facilities than the individual local government find optimal to supply. The central government thus would want to stimulate additional provision of local public facilities using contracts where local governments receive a transfer as compensation for increasing their supply. Since local governments differ regarding their efficiency in supplying facilities, the required amount of facilities and the corresponding transfer size should be allowed to vary across local governments. Originality/value Almost all countries are organized with multiple tiers of government, and local governments are important providers of many important welfare services. After labor, facilities are probably the second most important input in production of local public services. This paper offers insights into how the central government can efficiently stimulate the production of local public facilities.

Understanding the forces and critical features of a new reporting and budgeting system adoption by Indonesian local government

2020 ◽  
Vol 16 (1) ◽  
pp. 145-167
Author(s):  
Harun Harun ◽  
David Carter ◽  
Abu Taher Mollik ◽  
Yi An
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Dominant Role ◽  
New Technology ◽  
National Level ◽  
Accounting System ◽  
Local Authorities ◽  
Content Type ◽  
Policymaking And Implementation

Purpose This paper aims to critically explore the forces and critical features relating to the adoption of a new reporting and budgeting system (RBS) in Indonesian local governments. Design/methodology/approach The study is based on an intensive analysis of document sources and interview scripts around the institutionalization of RBS by the Indonesian government and uses the adaption of Dillard et al. (2004) institutional model in informing its findings. Findings The authors find that at the national level, the key drivers in RBS adoption were a combination of exogenous economic and coercive pressures and the wish to mimic accounting reforms in developed nations. At the local government level, the internalization of RBS is a response to a legal obligation imposed by the central government. Despite the RBS adoption has strengthened the transparency of local authorities reports – it limits the roles of other members of citizens in determining how local government budgets are allocated. Research limitations/implications The results of the study should be understood in the historical and institutional contexts of organizations observed. Practical implications The authors reinforce the notion that accounting as a business language dominates narratives and conversations surrounding the nature of government reporting and budgeting systems and how resource allocation is formulated and practiced. This should remind policymakers in other developing nations that any implementation of a new accounting technology should consider institutional capacities of public sector organizations and how the new technology benefits the public. Social implications The authors argue that the dominant role of international financial authorities in the policymaking and implementation of RBS challenges the aim of autonomy policies, which grant greater roles for local authorities and citizens in determining the nature of the budgets and operation of local authorities. Originality/value This study extends institutional theory by adapting the Dillard et al. (2004) model in explaining the forces, actors and critical features of a new accounting system adoption by local governments.

Local government modernization in Albania

2018 ◽  
Vol 31 (4) ◽  
pp. 466-506 ◽  
Author(s):  
Elona Guga
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Historical Development ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Single Case ◽  
Administrative Reform ◽  
Current Debate ◽  
Content Type ◽  
The Impact

Purpose An attempt will be made to shed light on the course and pattern of the decentralization process by analyzing the historical development of local government and the territorial-administrative reform of 2015-2020 in Albania and the factors that have been shaping it. The scope is to understand the impact of the reform elements on the subnational governments and in general their overall impact on the government. The purpose of this paper is to fill the gap in the existing literature for Albania and at offering some insights on the administrative-territorial reform. Furthermore, it will contribute to the current debate on fiscal decentralization in South Eastern European (SEE) countries and the public management model implemented after the last reforms. Design/methodology/approach The first section analyzes the historical development of local government reforms from the 1990s to today and will help to identify if there is instrumentalism advocacy. The second section explains the determinants of the local government’s fiscal autonomy in Albania of the period from 2003 to 2016. Three indicators are used as proxies for fiscal decentralization: the proportion of subnational expenditure over national expenditure, of total subnational revenues over total revenues of central government and the indicator of own subnational revenues over total revenues of the central government. The data from the budget and the revised budgets are then compared. Findings Despite Albania’s commitment to decentralize its government functions, there is still work to do. The territorial and administrative reform has not generated the expected results. Almost 90 percent of the revenues still come from the central government’s unconditional transfers. Therefore, the Albanian Government should build capacities and skills, and train the employees of each level of government that currently benefit from international assistance. Research limitations/implications The analysis represents a single case study on the territorial-administrative reform in Albania. Its implementation started in 2015 and it is probably too early to discuss outcomes. However, it might be useful to analyze the first results after a two-and-a-half-year period of implementation of reforms. Despite contributing to the existing gap in the literature, additional research will be necessary to better understand the decentralization process not only in Albania, but in all SEE countries. Practical implications It is necessary to first understand the lack of initial output, as well as the various challenges faced, in order to take the corrective measures on time. Originality/value This paper discusses in detail the reform adopted and the progress made by the Albanian local government units. The reform attempts to develop better relationships between the central and local governments and hence improve their service delivery, transparency and accountability. This paper is the first one that is attempting to analyze the initial output of the territorial-administrative reform of 2015-2020.

Inter-governmental relations and procurement non-compliance in African local government systems

2019 ◽  
Vol 19 (4) ◽  
pp. 277-294
Author(s):  
Parestico Pastory
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Government Procurement ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Documentary Analysis ◽  
Sub Saharan ◽  
The Third World ◽  
Depth Interviews

Purpose The purpose of this study is to examine the implications of inter-governmental relations on procurement compliance in local government. Design/methodology/approach A total of 68 in-depth interviews with local government officials and councillors in four different local government authorities, members of parliament in the local authorities accounts committee and a committee clerk were carried out in addition to documentary review. Findings Evidences from in-depth interviews and documentary analysis point to central government as one of key reasons for procurement non-compliance. The nature of inter-governmental relations enables the central government to issue encroaching directives on local government procurement plans or take handicapping actions on the financial ability of the local governments to execute procurement plans. Practical implications The study adds inter-governmental relations on strategies for improving procurement compliance in African local government systems. Originality/value Despite increasing research on procurement compliance, the complexity of regulatory non-compliance in local government procurement has not been adequately analysed. The current study uses an inter-governmental relations perspective to contribute knowledge on procurement compliance in local government systems of the Third World, sub-Saharan Africa in particular.

Public interest and accrual accounting: are they aligned?

2018 ◽  
Vol 14 (4) ◽  
pp. 366-380 ◽  
Author(s):  
Sylvia ◽  
Eko Ganis Sukoharsono ◽  
Yeney Widya Prihatiningtias ◽  
Roekhuddin
Keyword(s):  
Local Government ◽  
Public Interest ◽  
Local Governments ◽  
Central Government ◽  
Social Situation ◽  
Government Accountability ◽  
Accrual Accounting ◽  
Content Type ◽  
The Public ◽  
The Government

Purpose The purpose of this paper is to evaluate the merits of accrual-based accounting for the public in an Indonesian local government. It gives insights into the connection between the new practices and responses from government apparatus. Design/methodology/approach The paper applies genetic structuralism from Pierre Bourdieu to study the interrelation of habitus, field and capital in the accrual accounting implementation. Findings The result indicates a symbolic dominance of central government in the implementation of accrual-based accounting in the local government. Accrual accounting is considered to be a technique of government accountability which is independent from political and social situation. Practical implications The accrual accounting implementation preoccupies the government officials in their study of the preparation of financial statements while its utilization to increase the public welfare is still ignored. Social implications The government still prioritizes accountability and transparency for managerial and political purposes. Hence, the public interest is less superior compared with the formalities established between governments – the central government and local governments – and the regional legislator. Originality/value This paper contributes to the evaluation of the alignment of government policy with the public interest.

Municipal debt will hinder financial reform in China

2015 ◽  
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Government Debt ◽  
Bank Loans ◽  
Municipal Bonds ◽  
Short Term ◽  
Fiscal Stimulus ◽  
Content Type ◽  
Loan Financing

Subject China's local government debt bailout. Significance China's local governments issued 734 billion renminbi (118 billion dollars) last month, accounting for some 35% of total bond issuance. A 1-trillion-renminbi local government debt-swap programme was introduced in March, under a pilot initiative announced in August 2014, and expanded last month by another 1 trillion renminbi. A slowdown in investment and an increasing use of bank loans by local governments to roll over debt may now have forced the central government to act boldly. Impacts Falling fiscal revenues, policy targets and the legacy of the 2008-09 fiscal stimulus will increase the supply of municipal bonds. State-owned commercial banks under the direction of the PBoC will mop up excess supply. Slower investment and lending puts pressure on central government to accelerate infrastructure investment and public-private partnerships. The PBoC will further adjust bank reserve ratios downwards if the slowdown in investment persists. Shifting away from short-term loan financing will shrink bank margins and slow down interest rate reform.

Fiscal Decentralisation and Provision of Local Public Services in Selected EU Countries

2015 ◽  
Vol 13 (3) ◽  
pp. 595-613 ◽  
Author(s):  
Martina Halásková ◽  
Renata Halaskova
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Public Services ◽  
Social Protection ◽  
Central Government ◽  
Government Expenditure ◽  
Eu Countries ◽  
Local Public Services ◽  
Fiscal Decentralisation ◽  
Local Government Expenditure

Fiscal decentralisation aims to provide own financial resources or transfers from the central government for an efficient use of the original competences by local governments. This paper deals with the role of fiscal decentralisation and its impact on local public services. Rational indicators of revenue and expenditure fiscal decentralisation and selected local government expenditure are compared by public services, including the extent of decentralisation in selected EU countries. Modelling and comparison of selected EU countries is carried out through the method of multidimensional scaling according to the similarity of local government expenditure on services of social protection, healthcare, education, and recreation and culture (as % GDP) in years 2006, 2009 and 2012.

scholarly journals Exploring government internet financial reporting in Indonesia

2018 ◽  
Vol 21 (1) ◽  
pp. 115-138
Author(s):  
Pepie Diptyana ◽  
Nur'aini Rokhmania
Keyword(s):  
Local Government ◽  
Population Density ◽  
Financial Reporting ◽  
Local Governments ◽  
Central Government ◽  
Political Competition ◽  
Provincial Government ◽  
Local Dependency ◽  
Government Websites ◽  
Almost All

Government financial reporting as public accountability and transparency is important. Previous research show that almost all local government in Indonesia have their official website, which is active use as presenting news, local potentials, and local government services. Unfortunately, there are still limited local governments which are disclose their financial information as well as budgeting reports and financial statements on their websites. This research aims to explore whether political competition, local asset, local dependency, population density, and information openness award have influenced IFR practice in government in Indonesia. We investigate financial report and budget report as of internet financial reporting (IFR) data of 32 provincial government websites. Indonesia consists of 34 provinces, which are 32 provincial websites consistently accessible and use as sample in this research. The empirical results show that local dependency toward central government and Information Openness Award positively significant influence IFR practices in provincial level in Indonesia. There is no significant influenced of political competition, local asset and population density to IFR in Indonesia Provinces website. Our research contribution is to extend previous research by concerning Information Openness Award as independent variable which influenced to IFR practice in local government.

scholarly journals Making e-procurement work in a decentralized procurement system

2015 ◽  
Vol 28 (3) ◽  
pp. 198-220 ◽  
Author(s):  
Achmad Nurmandi ◽  
Sunhyuk Kim
Keyword(s):  
Local Government ◽  
Human Resources ◽  
Local Governments ◽  
Central Government ◽  
Human Resources Management ◽  
Government Procurement ◽  
Fiscal Year ◽  
Content Type ◽  
Decentralized System ◽  
Procurement System

Purpose – The purpose of this paper is to investigate the implementation of initiative e-procurement in decentralized system on Indonesia’s local government system. Design/methodology/approach – The authors combine quantitative and qualitative methods. The central finding of this research is that human resources are the pivotal factors that determine the performance of local e-procurement in three cities. This research focusses on three local governments in Indonesia – Yogyakarta City, Tangerang City, and Kutaikartanegara Regency. Findings – The central finding of this research is that human resources are the pivotal factors that determine the performance of local e-procurement in three cities. However, Tangerang City is going institutionalization phase in e-procurement initiative to ensure its sound local regulation. Research limitations/implications – There are several limitations to this study including the recent nature of decentralized procurement in Indonesia, limited standardized and disaggregated data on local government procurement expenditures and performance. Practical implications – The study recommends that human resources management in procurement needs to be addressed by both local and central government. Originality/value – e-Procurement is an important instrument for preventing corruption in goods and services procurement. Indonesia has been implementing an e-procurement policy since 2008 based on a Presidential Decree. The president has issued annual orders (presidential instructions), and all central ministries and local governments have been required to comply with them to obtain their budget through the e-procurement system. However, as of 2012 fiscal year, only around 10.26 percent of the central government institution procurement budget and 10 percent of the local government procurement budget in Indonesia went through the e-procurement system, with wide variations among cities.

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

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

scholarly journals Game Theory-Based Analysis of Local Governments’ Behavioral Dissimilation in the Third-Party Soil Pollution Control under Chinese-Style Fiscal Decentralization

Land ◽  
2021 ◽  
Vol 10 (4) ◽  
pp. 389
Author(s):  
Caihua Zhou
Keyword(s):  
Local Government ◽  
Soil Pollution ◽  
Pollution Control ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Third Party ◽  
The Third ◽  
Party Control ◽  
The Third Party

The participation of a third party of the environmental service enterprise theoretically increases the level and efficiency of soil pollution control in China. However, Chinese-style fiscal decentralization may have a negative impact on the behaviors of participants, especially the local government. First, this paper conducts a positioning analysis on participants of the third-party soil pollution control in China and discusses the behavioral dissimilation of the local government under fiscal decentralization. Second, taking the government’s third-party soil pollution control as a case, a two-party game model of the central government and the local government is established around the principal-agent relationship, and a tripartite game model of the central government, the local government, and the third-party enterprise is designed around the collusion between the local government and the third-party enterprise. The results show that Chinese-style fiscal decentralization may lead to the behavioral dissimilation of local governments, that is, they may choose not to implement or passively implement the third-party control, and choose to conspire with third-party enterprises. Improving the benefits from implementing the third-party control of local governments and third-party enterprises, enhancing the central government’s supervision probability and capacity, and strengthening the central government’s punishment for behavioral dissimilation are conducive to the implementation of the third-party soil pollution control. Finally, this study puts forward policy suggestions on dividing the administrative powers between the central and local government in third-party control, building appraisal systems for the local government’s environmental protection performance, constructing environmental regulation mechanisms involving the government, market and society, and formulating the incentive and restraint policies for the participants in the third-party soil pollution control.

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