Fiscal decentralization and spillover effects of local government public spending: the case of Italy

Siano, Rita De; D’Uva, Marcella

doi:10.1080/00343404.2016.1208814

Cited by 37 publications

(19 citation statements)

References 31 publications

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“…Grisorio and Prota () show that fiscal decentralization contributes to an increase in government spending on welfare and infrastructure in Italian regions. In the same vein, De Siano and D'Uva () find spatial interactions in decisions made regarding regional public expenditure. As a result, Italian regional governments can enhance neighboring governments’ public expenditures on education, health and transport.…”

Section: Literature Reviewmentioning

confidence: 83%

“…• Control variables ( X variables ). Following previous empirical studies, we include controlled variables affecting provincial government size and public spending as follows: (i) gross provincial product per capita ( GPP ), reflecting provincial economic growth and testing for the presence of Wagner's law; (ii) population density ( DEN ), relating to the presence of congestion effects or scale economies in local public goods provision, with a negative sign for population density referring to the case of scale economies and a positive sign to the case of congestion effects (De Siano and D'Uva, ); (iii) provincial urban population rate ( URB ) and provincial private sector development measured by provincial private investment to GPP ( PRIIVN ), relating to the needs of provincial government expenditure; and (iv) provincial fiscal transfers ( FT ), measured by provincial fiscal transfers to total provincial government expenditures. The literature on fiscal transfers stresses that fiscal transfers would increase government size, and capital and current spending.…”

Section: Methodology and Datamentioning

confidence: 99%

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Local Governance: Impacts of Fiscal Decentralization on Government Size and Spending Composition in Vietnam*

Thanh

Nguyen

2019

Asian Economic Journal

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The study provides an understanding of the impacts of fiscal decentralization and local governance on government size and spending composition. We use a balanced panel data set of 63 provinces of Vietnam over the 2006-2015 period. By estimating the spatial Durbin model, we find that local public spending and government size grow over time and have spatial spillovers. Fiscal decentralization significantly reduces public spending and government size, which supports the Leviathan hypothesis. More interestingly, combining local governance, the marginal spatial spillover effects of the fiscal decentralization on public spending and government size are intensified. Our findings imply that local governments should enhance interregional collaboration in fiscal management to limit duplicate public spending and promote regional sustainable development.

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Section: Literature Reviewmentioning

confidence: 83%

Section: Methodology and Datamentioning

confidence: 99%

Local Governance: Impacts of Fiscal Decentralization on Government Size and Spending Composition in Vietnam*

Thanh

Nguyen

2019

Asian Economic Journal

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“…Those supporting it, state it could bring spatial interactions of public spending. In addition, it could increase the accountability of local governments and may improve the efficiency of these entities (De Siano and D’Uva, 2017). In addition, higher fiscal decentralization is associated with lower levels of corruption (Fisman and Gatti, 2002; Treisman, 2006).…”

Section: Theoretical Considerations On Decentralization Processmentioning

confidence: 99%

“…They are mainly associated with the availability and the use of financial resources. Resources can be used according to local government politician’s preferences without considering the efficiency (De Siano and D’Uva, 2017), thus threatening fiscal sustainability (Faguet, 2014). Treisman (2006) indicated another side effect of fiscal decentralization, which obscures the role of central governance.…”

Section: Theoretical Considerations On Decentralization Processmentioning

confidence: 99%

“…It could happen especially when local governments do not share the same goals as the central level and consequently bring negative jurisdictional spillovers (Psycharis et al , 2016; Ladner et al , 2016). Higher levels of decentralization could undermine macroeconomic policy and stabilization, favoring local competitive interactions (De Siano and D’Uva, 2017). Furthermore, decentralization could be strongly related to the accountability and behavior of local bureaucrats, which can both differ between centralized and decentralized systems (Fisman and Gatti, 2002).…”

Section: Theoretical Considerations On Decentralization Processmentioning

confidence: 99%

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Local government modernization in Albania

Guga

2018

IJPSM

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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.

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Decentralization policies and sustainable rural development: A path to eradicating poverty (SDG 1) and hunger (SDG 2)

Ain,

Yousaf,

Tahir

2024

Sustainable Development

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Rural infrastructure development is crucial for achieving sustainable development. It enhances quality of life, improves connectivity, promotes economic growth, and supports food security. Whereas rural infrastructure development is influenced by fiscal decentralization, which enables local administrations to prioritize investments and allocate resources based on local needs and priorities. Given this background, this empirical study investigates the impact of devolution reform policy on rural infrastructure development in Pakistan, employing the Stackelberg model. The findings exhibit a positive relationship between subnational government spending through decentralization and the accessibility to transport and communication services, rural development, and development of irrigation infrastructure. The theoretical model proposes that decentralized information permits efficient decision‐making, with local authorities better equipped to deliver public services aligned with local preferences. Increased public utilization of services is expected as a result of decentralization. The combination of empirical analysis and theoretical foundations suggests that the 2001 decentralization policy enhances the accountability of subnational governments. By providing them with more informed and essential benefits for resource allocation according to voter priorities, this policy ultimately increases the efficiency of public expenditures in achieving sustainable development.

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Fiscal decentralization and spillover effects of local government public spending: the case of Italy

Cited by 37 publications

References 31 publications

Local Governance: Impacts of Fiscal Decentralization on Government Size and Spending Composition in Vietnam*

Local Governance: Impacts of Fiscal Decentralization on Government Size and Spending Composition in Vietnam*

Local government modernization in Albania

Decentralization policies and sustainable rural development: A path to eradicating poverty (SDG 1) and hunger (SDG 2)

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