No taxation, no representation: An investigation of the relationship between natural resources and fiscal decentralization

2018 ◽  
Vol 36 (7) ◽  
pp. 1234-1255
Author(s):  
Mohammad Arzaghi ◽  
Andrew Balthrop
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Government Expenditures ◽  
Government Control ◽  
Resource Rents ◽  
Natural Resource Rents ◽  
The Relationship

Rents from natural resources can alter the relationship between central and local governments by providing a new source of government financing. We develop a model to explore the relationship between fiscal decentralization and resource abundance. Our model indicates that natural resource rents can detach central government expenditures from the tax base so that the central government can spend more to persuade a fractious periphery to remain under central government control. Thus, other things being equal, higher natural resource rents can result in less decentralized government expenditures. We empirically explore the relationship between fiscal decentralization and natural resource rents using a panel of 60 countries over the past 40 years. Empirical results support our economic model: A 1% increase in natural resource rents as a fraction of gross domestic product results in government expenditures that are 0.53% less decentralized.

scholarly journals Short-term effects of national-level natural resource rents on life expectancy: A cross-country panel data analysis

PLoS ONE ◽  
2021 ◽  
Vol 16 (5) ◽  
pp. e0252336
Author(s):  
Isaac Lyatuu ◽  
Georg Loss ◽  
Andrea Farnham ◽  
Mirko S. Winkler ◽  
Günther Fink
Keyword(s):  
Economic Growth ◽  
Life Expectancy ◽  
Natural Resources ◽  
Population Health ◽  
Natural Resource ◽  
Short Term ◽  
Resource Rents ◽  
Natural Resource Rents ◽  
Cross Country ◽  
The Relationship

While a substantial amount of literature addresses the relationship between natural resources and economic growth, relatively little is known regarding the relationship between natural resource endowment and health at the population level. We construct a 5-year cross-country panel to assess the impact of natural resource rents on changes in life expectancy at birth as a proxy indicator for population health during the period 1970–2015. To estimate the causal effects of interest, we use global commodity prices as instrumental variables for natural resource rent incomes in two-stage-least squares regressions. Controlling for country and year fixed effects, we show that each standard deviation increase in resource rents results in life expectancy increase of 6.72% (CI: 2.01%, 11.44%). This corresponds to approximately one additional year of life expectancy gained over five years. We find a larger positive effect of rents on life expectancy in sub-Saharan Africa (SSA) compared to other world regions. We do not find short-term effects of rents on economic growth, but show that increases in resource rents result in sizeable increases in government revenues in the short run, which likely translate into increased spending across government sectors. This suggests that natural resources can help governments finance health and other development-oriented programs needed to improve population health.

scholarly journals Natural Resources and Civil Conflict: The Role of Military Expenditures

2021 ◽  
Vol 14 (12) ◽  
pp. 575
Author(s):  
Rabah Arezki ◽  
Markus Brueckner
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Resource Curse ◽  
Civil Conflict ◽  
Resource Rents ◽  
Important Message ◽  
Military Expenditures ◽  
Natural Resource Rents ◽  
The Relationship

Military expenditures significantly affect the relationship between the risk of civil conflict outbreak and natural resources. We show that a significant positive effect of natural resource rents on the risk of civil conflict outbreak is limited to countries with low military expenditures. In countries with high military expenditures, there is no significant effect of natural resource rents on civil conflict onset. An important message is thus that a conflict resource curse is absent in countries with sufficiently large military expenditures.

scholarly journals THE ROLE OF LOCAL GOVERNMENTS IN REGIONAL FINANCIAL MANAGEMENT FOR THE HANDLING OF THE COVID-19 PANDEMIC

Yurispruden ◽  
2021 ◽  
Vol 4 (2) ◽  
pp. 208
Author(s):  
Fahrul Abrori
Keyword(s):  
Local Government ◽  
Research Methods ◽  
Financial Management ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
The Government ◽  
The Stability ◽  
The Relationship

 ABSTRAKPandemi Covid-19 yang terjadi di Indonesia membuat pemerintah membuat kebijakan-kebijakan sebagai stimulus untuk menjaga kestabilan masyarakat dan perekonomian. Pemerintah pusat memberikan kewenangan kepada pemerintah daerah untuk mengelola keuangan daerah untuk menangani covid-19 di daerah masing-masing. Hal ini disebabkan karena pemerintah daerah lebih memahami kebutuhan daerahnya. Permasalahan yang diangkat Pertama, bagaimana hubungan Pemerintah Pusat dan Pemerintah Daerah dalam pengelolaan keuangan untuk penanganan pandemi Covid-19? Kedua, Apa peran Pemerintah Daerah dalam pengelolaan keuangan daerah untuk penanganan pandemi Covid-19? Menggunakan metode penelitian yuridis normatif dengan pendekatan perundang-undangan dan pendekatan konsep. Hubungan Pemerintah Pusat dan Pemerintah Daerah dalam Pengelolaan Keuangan untuk Penanganan Pandemi Covid-19 yaitu desentralisasi fiskal yang mana. Peran Pemerintah Daerah dalam Pengelolaan Keuangan Daerah untuk Penanganan Pandemi Covid-19 yaitu dengan melakukan refocusing kegiatan, realokasi anggaran, dan Penggunaan Anggaran Pendapatan dan Belanja Daerah.Kata kunci: Pemerintah Daerah, Pengelolaan Keuangan Daerah, Pandemi Covid-19 ABSTRACTThe Covid-19 pandemic in Indonesia led the government to make policies as a stimulus to maintain the stability of society and the economy. The central government authorizes local governments to manage local finances to deal with covid-19 in their respective regions. This is because the local government better understands the needs of the region. The issue raised first, how is the relationship between the Central Government and Local Government in financial management for the handling of the Covid-19 pandemic? Second, What is the role of local governments in regional financial management for the handling of the Covid-19 pandemic? Using normative juridical research methods with statutory approaches and concept approaches. The relationship between the Central Government and Local Government in Financial Management for the Handling of the Covid-19 Pandemic is fiscal decentralization. The role of local governments in regional financial management for the handling of the Covid-19 pandemic is by refocusing activities, reallocating budgets, and using regional budgets.Keywords: Local Government, Regional Financial Management, Covid-19 Pandemic

scholarly journals Analisis Hubungan Kemandirian Keuangan Daerah dan Ketergantungan Daerah Terhadap Pengangguran dan Kemiskinan

2018 ◽  
Vol 5 (2) ◽  
pp. 217-225
Author(s):  
Rosyafa Febiandani ◽  
Deky Aji Suseno
Keyword(s):  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Secondary Data ◽  
Direct Relation ◽  
Regional Autonomy ◽  
Local Revenue ◽  
Central Java ◽  
Relationship Of ◽  
The Relationship

Adanya desentralisasi fiskal diharapkan dapat menciptakan kemandirian daerah dan dapat mengurangi ketergantungan pemerintah daerah terhadap pemerintah pusat. Kemandirian keuangan daerah dicerminkan dengan perbandingan besarnya PAD terhadap total pendapatan daerah. Sejak 10 tahun dilaksanakannya otonomi daerah sesuai UU No 32 Tahun 2004, kemandirian keuangan daerah di Provinsi Jawa Tengah masih berada di level yang kurang baik dibandingkan dengan provinsi lainnya di Pulau Jawa. Jumlah pengangguran dan jumlah penduduk miskin di Provinsi Jawa Tengah juga masih terhitung tinggi. Penelitian ini bertujuan untuk mengetahui hubungan dari tingkat kemandirian keuangan daerah dan tingkat ketergantungan daerah terhadap tingkat pengangguran dan tingkat kemiskinan di kabupaten/kota Provinsi Jawa Tengah Tahun 2013. Data yang digunakan dalam penelitian ini adalah data sekunder. Metode analisis yang digunakan adalah Analisis Korelasi Kanonikal menggunakan bantuan program SPSS. Hasil penelitian menunjukkan kemandirian keuangan daerah mempunyi hubungan yang signifikan, kuat, dan tidak searah dengan pengangguran dan kemiskinan. Sedangkan hubungan antara ketergantungan daerah terhadap kemiskinan dan pengangguran mempunyai hubungan yang signifikan, tidak kuat, dan tidak searah. Peningkatan kemandirian keuangan daerah guna mengurangi tingkat ketergantungan terhadap pemerintah pusat dapat dilakukan dengan cara menggali dan mengelola sumber daya atau potensi daerah yang dimilikinya secara efektif dan efisien sebagai sumber utama pendapatan keuangan daerahnya. Fiscal decentralization is expected to create  independency regional financial  and to reduce the dependence of local governments to the central government. Independency regional financial can be result by the ratio of PAD to total local revenue. Since 10 years the implementation of regional autonomy based on UU No. 32 of 2004, independency regional financial in Central Java  is still unwell compared to the other provinces in Java. As well as unemployed, and the poverty in Central Java is still high. The purpose of this research is to determine the relationship of  independency regional financial and the dependency regional to unemployment and poverty in Central Java period 2013. The data used in this research is secondary data. The method of analysis used is the Canonical Correlation Analysis using SPSS application. The results of research showed that the relationship of independency regional financial are significant, strong, and no direct relation with unemployment and poverty The relationship between dependency regional with unemployment and poverty are significant, no strong, and no direct relation. Increased the independency local financial to reduce the dependence on the central government can be done by managing the resources or the potential of region effectively and efficiently as the source from their financial local revenue

scholarly journals Dampak Desentralisasi Fiskal di Indonesia terhadap Pertumbuhan Ekonomi dan Disparitas Antar Daerah: Analisa Model Makro Ekonometrik Simultan

2003 ◽  
Vol 4 (1) ◽  
pp. 17-38 ◽  
Author(s):  
Teguh Dartanto ◽  
Bambang P.S. Brodjonegoro
Keyword(s):  
Economic Growth ◽  
Natural Resources ◽  
Natural Resource ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Revenue Sharing ◽  
High Rate ◽  
Block Grant ◽  
Transfer Scheme ◽  
Tax Sharing

From January 1, 2001, when new autonomy laws were implemented, lndonesia began to move toward decentralization of what had been a highly decentralized. This policy adopts two complimentary laws. Law No.22/1999, which basically the devolution policy, has been accompanied by La No.25/1999, which basically reflect that decentralization policy in Indonesia has adopted the concept of ”money follows function”. Law No.25/1999 describe the fiscal decentralization process that will create a new intergovernmental transfer scheme between the central government and local government. Some of items in the law were really new ones such as the natural resources revenue sharing, income tax sharing, general allocation fund (OAF) and specifics allocation fund (SAF). The policies oftax and natural resource revenue sharing can result in fiscal imbalance among regions. Tax and natural resources revenue sharing will benefit only to urbanized and natural resources rich regions Because of it, Central Government created General Allocation Funds. This fund has block grant characteristic and will be given to regions by fiscal gap conception. The purpose is to equalize fiscal capacity among regions that in turn also can reduce disparity among them. The Simultaneous Macro Econometric Model is made for analyzing the fiscal decentralization impact to economic growth and region disparity. The policy simulation in this model used transfer fund from central government such as Tax Revenue Sharing, Natural Resource Revenue Sharing and General Allocation Fund. The simulation is carried out to see the optimality of various possible existing policies. The optimality is measured by evaluating the high rate of economic growth and low disparity.

Natural Resource Rents-Capital Flight Nexus in Selected ECOWAS Countries: Evidence from Non-Linear ARDL Approach

2021 ◽  
Vol 10 (2) ◽  
pp. 81-97
Author(s):  
Abdulfatai A Adedeji ◽  
Sherifat W Kogbodoku
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Capital Flight ◽  
Asymmetric Effect ◽  
Distributed Lag ◽  
Resource Rents ◽  
Long Run ◽  
Short Run ◽  
Natural Resource Rents ◽  
Symmetric Effect

The challenge of capital flight in the ECOWAS sub-region is worrisome. Huge revenue from natural resources also contributes to the relocation of available resources necessary for the development of the region. The study identifies the revenue from natural resources as a key driver of capital flight in the region. Hence, this study analyzed the effect of natural resource rents on capital flight in ECOWAS countries accounting for the role of asymmetry. Also, the study employed the nonlinear autoregressive distributed lag (NARDL) model to account for short-run and long-run asymmetries. The results revealed the presence of asymmetry in five countries, while two countries displayed symmetric effects. It also showed that the symmetric effect of natural resource rents on capital flight is weak for Guinea and Nigeria in the short-run while the long-run effect is not more pronounced for Nigeria. In the case of asymmetric effect, natural resource rents amplified capital flight in Cape Verde and Sierra Leone. Further evidence shows that the non-linearity of natural resource rents does not encourage capital flight in Burkina Faso, Cote d’Ivoire, and Ghana. Hence, the countries should promote transparency and accountability in the management of proceeds from natural resources to enhance development in the region.

scholarly journals Good governance

2020 ◽  
Author(s):  
Somayeh Sedighi ◽  
Miklós Szanyi
Keyword(s):  
Exchange Rate ◽  
Natural Resources ◽  
Natural Resource ◽  
Good Governance ◽  
Development Rate ◽  
Resource Rents ◽  
Slow Development ◽  
Manufacturing Sectors ◽  
Natural Resource Rents ◽  
Rich Countries

Resource-rich countries experience a slow development rate in manufacturing sectors compared to countries with scarce resources. it has been a challenge to demystify the slow development in manufacturing sectors in those countries, therefore this study aimed to develop an efficient model to estimate the effects of good governance and natural resource rents on the performance of manufacturing export in countries endowed in natural resources. In this study world bank data for the year, 2000 to 2016 and the panel data model from 14 countries rich in natural resources were used alongside the six dependent variable indices including good governance, natural resource rents, real exchange rate, and gross domestic product (GDP). The results revealed that an increase in natural resources (NR), rule of low (RL), control of corruption (CC) as well as a reduction in inflation (INF) in countries under investigation will lead to increase in Manufacturing export. As well as an increase in Real Exchange Rate (RER) will lead to a reduction in the Manufacturing export of these countries. Hence demystify the slow development rate in manufacturing sectors in resource-rich countries.

scholarly journals Fiscal Competition Among Local Governments after Fiscal Decentralization

2016 ◽  
Vol 5 (1) ◽  
pp. 48
Author(s):  
Haryo Kuncoro
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Central Government ◽  
Fiscal Decentralization ◽  
Spatial Interaction ◽  
Government Expenditures ◽  
Fiscal Competition ◽  
Intergovernmental Grants ◽  
Intergovernmental Transfers ◽  
Local Government Expenditures

Spatial interaction among local governments in fiscal setting decisions is receiving increasingly attention in the applied public economics literature. Spatial interaction models rely on the presence of an externality from local budget making, that is external effects originate from inter-jurisdictional resource flows due to tax competition for a mobile base, or from local public expenditure spillovers into neighboring jurisdictions. Similarly, the intergovernmental grants competition exists when there is a rivalry among local governments to get them from central government. This paper attempted to identify how great the fiscal competition among local governments in Indonesia. Using spatial statistics, we concluded that the fiscal competition among municipalities was greater compared to the pre fiscal decentralization period. It seems that the local tax setting and expenditures decisions in particular municipality can be attributed to the mimicking behavior to neighbor regions. Also, we found that the fiscal competition among municipalities could be attributed negatively to the fiscal disparity. Those imply that in the regional autonomy era the local governments tend to increase their local own revenue intensively and demand for intergovernmental grants in order to finance their expenditures. In the long run, they could lead to the high cost economy, worsening fiscal dependency, and inefficiency of local government expenditures. Those findings above suggest that the distribution of intergovernmental transfers among regions should consider the local tax effort and the services minimum standard plays an important role to achieve the efficiency of local government expenditures.

Targeting rents: Global taxes on natural resources

2017 ◽  
Vol 19 (4) ◽  
pp. 445-464
Author(s):  
Magnus Reitberger
Keyword(s):  
Natural Resources ◽  
Natural Resource ◽  
Global Justice ◽  
Global Poverty ◽  
Resource Rents ◽  
Natural Resource Rents ◽  
Scholarly Attention

In the debate on global justice, proposals to tax natural resources in order to reduce global poverty and fund other worthwhile objectives have attracted scholarly attention and controversy. In this article, I argue that this debate can be advanced by more clearly focusing on natural resource rents rather than resources themselves or the undifferentiated stream of benefits they generate. I argue that taxes on natural resource rents cannot be reasonably rejected by either side in this debate, and that the arguments typically used to resist distributive claims to natural resources either have no relevance when it comes to rents, or actually support such taxes.

Fiscal Decentralization in Transition Economies

2004 ◽  
pp. 126-141
Author(s):  
A. Chernyavsky ◽  
K. Vartapetov
Keyword(s):  
Public Finance ◽  
Transition Economies ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Government Control ◽  
Finance Reform ◽  
Fiscal Transfers ◽  
Fiscal Autonomy ◽  
Subnational Government ◽  
Tax Autonomy

By employing the methodology developed by the OECD the paper assesses the degree of revenue decentralization in Russia in comparison with other post-communist European countries. The paper provides theoretical arguments underpinning fiscal decentralization, analyzes the composition of subnational government revenues, the level of regional and local tax autonomy and types of intergovernmental fiscal transfers. The analysis presents the composition of revenues depending on the degree of subnational and local government control. In comparison with other transition countries fiscal decentralization in Russia is relatively low. It is concluded that Russia's public finance reform has not progressed towards providing greater fiscal autonomy for regional and local governments.

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