The Impacts of Intergovernmental Transfers on Local Governments’ Fiscal Behavior in China: A Cross-County Analysis (政府间转移支付对中国地方政府财政行为的影响：一项跨县分析)

2013 ◽  
Vol 72 (3) ◽  
pp. 264-277 ◽  
Author(s):  
Guang Zhang 厦门大学
Keyword(s):  
Local Governments ◽  
Intergovernmental Transfers ◽  
Fiscal Behavior

Vertical Imbalance and Local Fiscal Discipline in China

2008 ◽  
Vol 8 (1) ◽  
pp. 61-88 ◽  
Author(s):  
Gang Guo
Keyword(s):  
Local Governments ◽  
Panel Data Analysis ◽  
Political Stability ◽  
Dynamic Panel Data ◽  
Transfer Payment ◽  
System Reform ◽  
Fiscal Discipline ◽  
Dynamic Panel ◽  
Transfer Scheme ◽  
Fiscal Behavior

This article examines local fiscal behavior in contemporary China against the backdrop of decentralized spending responsibilities and recentralized revenues. Vertical imbalance after the 1994 tax-sharing system reform, coupled with other features of the fiscal institutions, is not conducive to conservative local fiscal behavior. Moreover, a main driving force behind the expansion of local governments is the politically motivated intergovernmental transfer scheme. The center in effect “buys” political stability in sensitive areas while holding local leaders accountable for their tax efforts. A dynamic panel analysis of Chinese counties reveals that a million-yuan increase in general transfer payment and salary raise subsidies would add, respectively, fifteen and sixteen employees to the county government payroll, other things being equal. At the same time, increased subsidies from upper-level governments do not “crowd out” or significantly affect local tax effort. Additional dynamic panel data analysis at the provincial level produced similar findings.

scholarly journals ASSESSMENT OF THE INFLUENCE OF LOCAL BUDGETS ON THE ECONOMIC DEVELOPMENT OF TERRITORIAL COMMUNITIES (ON THE EXAMPLE OF THE BUDGET OF THE CITY OF IRPIN)

2020 ◽  
Author(s):  
Oksana Lisnichuk ◽  
◽  
Vita Shvorak ◽  
Viktoriia Mazur ◽  
◽  
...  
Keyword(s):  
Local Governments ◽  
Specific Weight ◽  
Financial Economic ◽  
Economic Regulation ◽  
Economic Policies ◽  
Intergovernmental Transfers ◽  
Financial Independence ◽  
Economic Relationships ◽  
Local Budget ◽  
The City

The local budgets are an instrument of financial-economic regulation of the development of regions and the State as a whole. Both the efficient formation and administration of local budgets should be based on a combination of financial-economic relationships in the area of revenue generation, implementation of budget expenditures, the inter-budgetary relations and the development together with implementation of the balanced socio-economic policies directed towards ensuring the socio-economic growth of regions. The reform of budget decentralization has provided local governments with broader rights and new sources of financial resources, which has collectively increased the financial viability and autonomy of the regions. In this article article considers the peculiarities of the formation and implementation of local budgets (on the example of the budget of the city of Irpin). The sources of formation are described city budget revenues and directions of their use. In a section of revenue breakdown components of tax revenues on the main taxes and non-tax receipts of the local budget are analyzed. Specific weight of the intergovernmental transfers in the course of formation of income of local budgets is investigated. Analyses directions of use of budgetary resources by local governments. The main problems existing when forming revenues of local budgets are defined. Having analyzed the structure and dynamics of revenues and expenditures of the local budget. The revenues of the local budget of the city of Irpin have shown a growing dynamics, and expenditures tend to increase. The analysis shows that there are tendencies to increase their volume, which is certainly a positive aspect of the activities of local governments and decentralization reform. However, transfers make up an important part of the budget, which is negative, as the city budget is not fully independent. Of course, it is impossible to achieve full financial independence of the region in modern conditions, but it would be expedient to direct the vector of development to achieve financial independence. Analysis of the structure of expenditures by functional classification shows that during 2016-2019 most of the expenditures of local budgets were directed to the socio-cultural sphere. According to the analysis, the city of Irpin has a strong enough financial base to meet the needs of its residents. In addition, the analysis of the use of the city budget shows the diversity of expenditures and the presence of positive experience of community development.

scholarly journals Fiscal Behavior Volatility, Economic Growth, and Urban-Rural Income Disparity

2014 ◽  
Vol 2 (3) ◽  
pp. 217-225
Author(s):  
Yufeng Wang ◽  
Shulin Liu
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Local Governments ◽  
Economic Transition ◽  
Income Disparity ◽  
Dynamic Panel Model ◽  
Rural Income ◽  
Panel Model ◽  
Urban Rural ◽  
Fiscal Behavior

AbstractFiscal behavior of local governments has great volatility in China, especially in the period of economic transition. This paper estimates fiscal behavior volatility by making regression analysis of panel data of 30 provinces from 1994 to 2011. Then we establish a dynamic panel model to study the direct and indirect impact of the fiscal behavior volatility on the urban-rural income disparity. Empirical results show that urban-rural income disparity has nonlinear relationship with economic growth and financial development and that fiscal behavior volatility expands the urban-rural income disparity directly and indirectly. The larger fiscal behavior volatility comes greater urban-rural income disparity. We also find that the urban-rural income disparity is further enlarged through dual economic structure. If one of the economic growth and financial development is fixed, the other one has an inverted U-shaped relationship with urban-rural income disparity.

Nature over Art: No More Local Finance

1953 ◽  
Vol 47 (2) ◽  
pp. 461-477
Author(s):  
Rowland Egger
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Alexis De Tocqueville ◽  
Intergovernmental Transfers ◽  
Government Finance ◽  
Absolute Increase ◽  
Local Finance ◽  
Local Government Finance ◽  
Four Score ◽  
The Absolute

In 1866 an uncommonly knowledgeable gentleman, Alexis de Tocqueville by name, wrote as follows: “Je pense que dans les siècles démocratiques qui vont s'ouvrir l'indépendence individuelle et les libertés locales seront toujours un produit de l'art. La centralisation sera le gouvernement naturel.” Four score and five years later a distinguished compatriot documented the triumph of nature over art which de Tocqueville contemplated as a possibility, and analyzed at some length the instrumentality through which le gouvernement naturel has established its primacy over les libertés locales. Professor Jean Boulouis has recently pronounced a plaintive requiem for French local self-government culminating in these words: “On pourrait presque avancer, sans beaucoup d'exagération, qu'il n'existe plus de finances locales, mais tout au plus une localisation des finances nationales.”The two most striking phenomena of local government finance in recent decades are, first, the absolute increase in the amount of money disbursed by local governments, and second, the substantial expansion in the proportion of local government disbursements financed from intergovernmental transfers of funds—grants-in-aid, shared taxes, and various other devices by which money is shifted from one level of government to another.

Local Fiscal Behavior Under Subnational Provisions

2010 ◽  
Vol 28 (1) ◽  
pp. 3-28 ◽  
Author(s):  
Yilin Hou
Keyword(s):  
Local Governments ◽  
Policy Design ◽  
Local Level ◽  
State Level ◽  
State Governments ◽  
Local Policy ◽  
Policy Interactions ◽  
Local Finance ◽  
Fiscal Behavior ◽  
State And Local

Abstract This study examines fiscal policy interactions between state and local governments. Research in this area has been increasing but remains inadequate, especially on local policy options during economic downturns. State governments oversee local finances, also provide financial assistance; localities are expected to adopt counter-cyclical fiscal policies (CCFP). There has been an increasing literature on CCFP at the state level, but little on the local level. This paper uses U.S. county data for empirical analysis and attempts to move closer to consensus on the determinants of local savings and their effects on outlays. I find no evidence that localities smooth across boom-bust cycles; i.e., they do not save for revenue shortfalls. I find that state fiscal institutions cast real impact on local finance. These shed light on local policy making, also add to existing evidence for subnational policy design.

scholarly journals FEATURES OF PLANNING AND IMPLEMENTATION OF LOCAL BUDGETS IN THE CONTEXT OFTHE BUDGET AND DECENTRALIZATION REFORMS

2017 ◽  
pp. 132-144
Author(s):  
Yuliia OSTRISHCHENKO
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Poor Quality ◽  
Intergovernmental Transfers ◽  
Reform Implementation ◽  
Budget Reform ◽  
Subsidiarity Principle ◽  
Planning Methods ◽  
Local Budget ◽  
Budget Revenue

Introduction. Scarce local budget financial resources, lack of sufficient transparency of budget expenditures, and poor quality of public services provided by the central and local governments - all these factors require comprehensive governance reforms introduction primarily budget reform and powerdecentralization reform. Purpose. The aim of the article is to identify special traits and discover challenges of the local budgets planning and execution system, to analyze potential approaches to its improvement based on outcomes and effects of budget reform and local self-government reform implementation in Ukraine. Results. The article summarizes the tasks, measures and achievements of the local budgets reform and intergovernmental relation reform. The changes in the local budget revenue and expenditure structure were analyzed taking into account recent amendments to Budget and Tax Codes of Ukraine. The local budgets planning methods and approaches as well as procedures for fiscal equalization ofthe local government’s financial capacity were investigated; 2010-2017 reporting data on budget revenue and expenditures performance were analyzed. At the same time the article determines key budget parameters preliminarily included in draft 2018 Budget Law and medium-term Budget Declaration, in particular regarding local budgets and intergovernmental transfers and also represents review of progress achieved under the territorial communities’ amalgamation and establishment of direct interrelation between central government and newly formed amalgamated communities. Conclusion. According to the results ofthe research and analysis, the article substantiates the necessity of further local budget revenue amplification, the expediency of the budget decentralization considering budget subsidiarity principle, as well as the effectiveness of the new interbudgetary relation model.

Political Determination of Intergovernmental Grants: Evidence from the General Shared Tax in South Korea

2021 ◽  
Vol 19 (2) ◽  
pp. 263-278
Author(s):  
Sungchan Kim ◽  
Soyoung Park
Keyword(s):  
South Korea ◽  
Political Ideology ◽  
Local Governments ◽  
Central Government ◽  
Municipal Government ◽  
Political Influence ◽  
The Political ◽  
Intergovernmental Transfers ◽  
Allocation Mechanism ◽  
Distribution Of Resources

Intergovernmental transfers can help coordinate resource distribution among local governments to address the disparities between them. Local governments in South Korea heavily rely on general shared tax as an unconditional grant from the central government. Yet, the central government modifies factors and weights in the formula to allocate the grants; thus, the final grants might not always reflect the formula accurately. We aimed to empirically investigate the political influence on the allocation mechanism in practice related to the general shared tax in South Korea. We found that political influence, based on the political ideology of the municipal government chief, which is the same as that of the president, affects the amount of increased general shared tax from the central government. This indicates that the framework for the distribution of resources between different levels of governments is neither efficient nor equitable.

scholarly journals Political cycles, spatial interactions and yardstick competition: evidence from Italian cities

2019 ◽  
Vol 20 (4) ◽  
pp. 1093-1115
Author(s):  
Massimiliano Ferraresi
Keyword(s):  
Local Governments ◽  
Strategic Interactions ◽  
Yardstick Competition ◽  
Spatial Interactions ◽  
Political Cycles ◽  
Competition Hypothesis ◽  
Political Cycle ◽  
Fiscal Behavior ◽  
Novel Strategy ◽  
Analysis Point

Abstract I aim to identify the presence of spatial interactions among local governments by exploiting a novel strategy. Specifically, I take advantage of the political cycle of Italian municipalities over the period of 2001–2011 to isolate the effect of the spending decisions of one municipality on neighboring municipalities. The results of this analysis point to the presence of strategic interactions between neighboring municipalities and indicate that such fiscal behavior is more pronounced during electoral years compared to non-electoral ones, when municipalities are governed by coalitions backed by a small majority, and in cities guided by a mayor who can run for re-election. Taken together, these results suggest that the observed spatial dependence in spending decisions seems to be consistent with the yardstick competition hypothesis.

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