scholarly journals 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

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.

scholarly journals Public Investment Choices by Local and Central Governments

2019 ◽  
Vol 34 (Supplement_1) ◽  
pp. S52-S57
Author(s):  
Katrina Kosec ◽  
Tewodaj Mogues
Keyword(s):  
Local Governments ◽  
Natural Experiment ◽  
Central Government ◽  
Formal Model ◽  
Public Investment ◽  
Spatial Regression ◽  
Lower Priority ◽  
Rural Ethiopia ◽  
Public Resource ◽  
Investment Choices

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.

Compensating Changes to the Property Tax Levy? An Empirical Test of the Residual Rule

2017 ◽  
Vol 46 (6) ◽  
pp. 949-973 ◽  
Author(s):  
Spencer T. Brien
Keyword(s):  
Local Governments ◽  
Formal Model ◽  
Empirical Test ◽  
Property Tax ◽  
Tax Administration ◽  
County Governments ◽  
Active Approach ◽  
The Difference ◽  
Using Data ◽  
The Cost

The residual view of the property tax assumes that local governments set their levies equal to the difference between budgeted expenditures and expected receipts from other revenues. This approach allows them to adjust the levy to achieve greater overall revenue stability potentially at the cost of tax predictability. This article presents a formal model of the residual rule and uses it to test whether this active approach to property tax administration describes observed fiscal behavior. This test is conducted using data from county governments in Georgia over a fifteen-year period. The results support the validity of the residual rule over an alternative model of passive tax administration.

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

2013 ◽  
Vol 14 (1) ◽  
pp. 97-125 ◽  
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.

Strategic Interaction Among Overlapping Local Jurisdictions

2017 ◽  
Vol 48 (6) ◽  
pp. 584-595 ◽  
Author(s):  
Spencer T. Brien
Keyword(s):  
School Districts ◽  
Dynamic Model ◽  
Local Governments ◽  
Property Tax ◽  
Strategic Interaction ◽  
Fiscal Policies ◽  
Strategic Interactions ◽  
Complete Understanding ◽  
Short Term ◽  
Tax Rate

This article explores the strategic interactions between overlapping counties and school districts within the context of property tax policy. Overlapping local governments share either part or all of their property tax bases and therefore may take into account each other’s tax policies when deciding their annual property tax rate. A dynamic model is developed to analyze how property tax rate determination is influenced by the fiscal policies of both overlapping and neighboring local jurisdictions. The results suggest a short-term mimicking effect that is largely canceled out the following period. These findings help to develop a more complete understanding of how the broader set of environmental and institutional attributes of local governments influence their fiscal policies.

scholarly journals How Does R&D Investment Affect the Financial Performance of Cultural and Creative Enterprises? The Moderating Effect of Actual Controller

2019 ◽  
Vol 11 (2) ◽  
pp. 297 ◽  
Author(s):  
Zhipeng Zang ◽  
Qiwei Zhu ◽  
Helena Mogorrón-Guerrero
Keyword(s):  
Financial Performance ◽  
Technological Innovation ◽  
Local Governments ◽  
Central Government ◽  
Moderating Effect ◽  
Short Term ◽  
D Investment ◽  
Positive Impacts

R&D investment has a sophisticated correlation with the financial performance of cultural and creative enterprises. In this study, using the panel data of listed cultural and creative enterprises in China from 2011 to 2013, we found that R&D investment has positive impacts on financial performance in both the current and the lag periods. However, these positive impacts are moderated by actual controllers. More specifically, there is a positive moderating effect on enterprises’ financial performance when the central government is the actual controller. On the other hand, there is no evident effect when the actual controller is a local government or a state-owned enterprise, and there is a clear negative moderating effect on financial performance when a natural person is the actual controller. Given these findings, we argue that local governments and state-owned enterprises should improve their long-term strategies for the cultural and creative enterprises they control and reduce actions forced by short-term economic goals. Additionally, local governments and state-owned enterprises should fundamentally stress the role of R&D in order to handle the pressure of increasingly keen competition from international companies’ technological innovation programs.

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.

scholarly journals Guarding Central Government Control over Forest: Forest Governance in the Post Decentralization Indonesia

2019 ◽  
Vol 4 (1) ◽  
pp. 5
Author(s):  
Ali Muhyidin
Keyword(s):  
Forest Management ◽  
Institutional Change ◽  
Local Governments ◽  
Sustainable Forest Management ◽  
Central Government ◽  
Forest Governance ◽  
New Order ◽  
Government Control ◽  
Forestry Sector ◽  
Expected Outcomes

This article examines whether reform forest governance in Indonesia started in the 1990s, which was partially aimed to promote equity, participation and sustainable forest management, has delivered its promised consequences. In the New Order era, the central government had sole authority in managing forests and granting exploitation rights. This authority has been partially transferred to local governments during a decentralization process to achieve greater efficiency and equity. However, the Indonesian case highlights that such institutional change has not yet produced the expected outcomes. The case indicates a contestation between the local and central government along with institutional resistance, which have considerably undermined decentralization processes in the forestry sector. This paper explores possible explanations for these processes.

scholarly journals Sustainable Land Planning in Case of Decentralized Land Authorities

2021 ◽  
Author(s):  
Xieer Dai
Keyword(s):  
Public Finance ◽  
Land Use ◽  
Local Governments ◽  
Central Government ◽  
Property Tax ◽  
Tax Revenue ◽  
Planning Time ◽  
Local Public Finance ◽  
Ownership Of Land

The main focus of this paper is to analyze the effect of local public finance on spatial land use through economic models and empirical evidence from Israel. The theoretic models extends the Alonso-Mill-Muth model by incorporating local public finance. The first finding is that steady population growth provides a channel for land capitalization through the mechanism of long term land property right. This implies a possible conflict of interest if ownership of land leasing revenue and the ad valorem property tax are not consistent. The empirical section examines one of the implications derived from the models highlighting a possible inconsistency between central and local governments due to land ownership centralization. This causes local tax revenue inequality among Israeli municipalities. Statistical evidence shows that cities with a larger share business land use can generate more tax without assistance from the central government, and are therefore more fiscal independent. Fiscal status has a significant effect on the planning time of residential construction. Municipalities with higher local tax revenues have shorter planning time(higher probability of acceptance) conditional on the plan’s size and other features.

Enlightened Localism in Contemporary China: Political Change in Property-Rights Institutions of Township and Village Enterprises

2010 ◽  
Vol 9 (5) ◽  
pp. 631-662 ◽  
Author(s):  
Junmin Wang
Keyword(s):  
Property Rights ◽  
Institutional Change ◽  
Local Governments ◽  
Central Government ◽  
Legal Issues ◽  
Township And Village Enterprises ◽  
Economic Elite ◽  
Financial Interests ◽  
Economic Elites ◽  
Political Agents

AbstractI examine the dynamic and interactive relationships between local governments and local economic elites as they attempted to privatize China’s township and village enterprises (TVEs) in the late 1990s. To pursue financial interests shared with the local economic elite, local governments informally privatized public TVEs and thereby compromised their role as political agents of the central government. This institutional change in property rights demonstrates a Chinese pattern of “enlightened localism” (Gregg 2003) by which the local political and economic actors develop a pragmatic way of coping with ambiguous legal issues. The deployment of enlightened localism in the TVE sector shows that China’s policies of economic decentralization unintentionally have led to a decentralization of political control.

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

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