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This study investigates the effects of fiscal decentralization on global competitiveness through the level of corruption. This study aims to clarify the causal impacts of fiscal decentralization policy on the achievement of competitiveness rank considering the degree of corruption in a country.

The paper uses an empirical study using both cross-country arithmetic mean and panel data, covering ten-year period (2005-2014). The analysis uses both linear and non-linear specification in search of actual intermediating effects of corruption with controlling the possible endogeneity.

The paper provides empirical insights about corruption effects of fiscal decentralization on global competitiveness. It suggests that increasing level of fiscal decentralization has a positive contribution to competitiveness for the less-corrupt countries. The adverse effects appear for corrupt countries where the delegation of fiscal authority should endanger the country competitiveness.

This research exploits the well-known measurement of fiscal decentralization, the degree of corruption and competitiveness. Therefore, this measurement might be challenged for representing the real concept of decentralization, corruption and competitiveness, furthermore its relationship. Despite the limitation, this research explores the entanglement of fiscal decentralization, corruption and competitiveness.

The paper provides the implications for the national policymakers about decentralizing the fiscal authority to achieve higher competitiveness level, through assessing their state of corruption.

The research provides additional comments for Oates’ (1972) decentralization theorem in connection to competitiveness, by adding corruption level as pre-requisite condition.

The authors test the effect of expenditure decentralization and fiscal equalization on short- and long-run economic growth and estimate two-step generalized method of moment (GMM) simultaneous equations models, using panel data for China and India for the period 1985 to 2005. The authors estimate two simultaneous equations: a growth equation and equalization equation and find that expenditure decentralization has a negative and statistically significant effect at conventional levels on short-run economic growth for both China and India. However, the authors also find that this result is sensitive to the set of included explanatory variables. This leads the authors to conclude that expenditure decentralization has no effect on short-run economic growth for either country. The authors also find that expenditure decentralization has a positive and statistically significant effect on fiscal equalization for both countries but find no evidence that fiscal equalization affects short-run economic growth for either China or India. In contrast, the authors find that expenditure decentralization has a positive effect on long-run economic growth in the case of India, but not in the case of China. Finally, the authors report evidence that fiscal equalization has no effect on long-run economic growth in the case of China; however, the authors find that equalization has a positive and statistically significant at conventional levels effect on long-run economic growth in India.

The authors estimate two-step GMM simultaneous equations models, using panel data for China and India for the period 1985 to 2005. To examine the effect of fiscal decentralization (FD) policies on economic growth in China and India, the authors estimate two equations: a growth equation and an equalization equation. For the growth equation, the authors adopt a production-function-based model that is widely used in the empirical literature on growth; however, the authors do make some compromises with this specification due to the unavailability of certain data. For the equalization equation, the authors include variables that economic theory and empirical evidence suggest influence fiscal disparities among subnational governments which in turn influence the demand for horizontal fiscal equalization (HFE). To the extent possible, the authors employ the same econometric specification, variable constructions and sample periods for both China and India. The authors believe this strategy provides a more rigorous test of the FD hypothesis.

The authors find that expenditure decentralization has a negative and statistically significant effect at conventional levels on short-run economic growth for both China and India. However, the authors also find that this result is sensitive to the set of included explanatory variables. This leads to conclude that expenditure decentralization has no effect on short-run economic growth for either country. The authors also find that expenditure decentralization has a positive and statistically significant effect on fiscal equalization for both countries but find no evidence that fiscal equalization affects short-run economic growth for either China or India. In contrast, the authors find that expenditure decentralization has a positive effect on long-run economic growth in the case of India, but not in the case of China. Finally, the authors report evidence that fiscal equalization has no effect on long-run economic growth in the case of China; however, the authors find that equalization has a positive and statistically significant at conventional levels effect on long-run economic growth in India.

Due to the importance of FD policies, especially to many developing countries that are currently pursuing decentralization reforms, future research should examine the effect of FD on economic growth for other countries. Furthermore, although it would be difficult to do so, future research should examine whether FD promotes political stability on ethnically diverse countries.

To the best of the authors’ knowledge, no one has examined the effect of FD policies on India's growth experience. What is more is that this is also the first of its kind to have a comprehensive empirical investigation into these two major developing countries with very interesting similarities and differences in FD policies. It is thus of great importance to examine the effect of expenditure decentralization and HFE on economic growth in China and India.

The impact of fiscal decentralization on equalization between regions has received significant attention but there has been much less research of the impact of decentralization on equalization within regions. Theory suggests that the tradeoff between local fiscal autonomy and equalization ought to be most pronounced at the sub-region level where rural-urban disparities in the level of development are substantial. This paper is an empirical analysis of the impact of fiscal decentralization on equalization within one Russian region, Leningrad (State). We show that the regional government uses a mixture of fiscal instruments to strike a balance between giving more budgetary autonomy to local governments and eliminating the disparities among them. We also develop a method for studying this tradeoff between decentralization and equalization when only limited data are available. Finally, we argue and demonstrate that without a detailed understanding of the institutional arrangement for intergovernmental fiscal relations, one cannot evaluate the equalization or decentralization implications.

The purpose of this study is to investigate the relationship between government and Balinese society in tax decentralization through budgeting seem to insignificantly improve the welfare of Balinese society.

This research was conducted in Bali Province involving eight regencies and one city. The data used in this study were secondary data, derived from relevant institutions or from websites through internet browsing and other documentations in the form of official reports/publications, such as regional budget, accountability reports, regional regulations and documents on budget and development of the regional economy. The present research used the partial least squares analysis technique.

Fiscal decentralization does not necessarily lead to better budget management. The success of fiscal decentralization can be found in the quality of the regional budget and the quality of budget management. The allocation of the regional budget for public service improvement and the development of infrastructure will increase the economic capacity of the regions. Improvement in regional economic capacity encourages the improvement of community welfare.

This income inequality points to the issue of fiscal capacity. The development of the financial role of district/city regions in the Province of Bali remains at a level gap with the development level of community welfare. During this period, the financial role of the government as estimated from the ratio of the national budget to the regional budget is higher than that of the society development. The acceleration role of the government is not proportional to the development of Human Development Index outcomes.

The purpose of this paper is to examine whether fiscal decentralization has impacts on city innovation level and to examine the moderating effects of the preference for government innovation in China.

Using a panel data of China’s 278 cities from 2003 to 2016, the authors first use fixed-effect model and quantile regression to analyze the impact of fiscal decentralization on city innovation level and the variations of impacts conditional on different innovation levels, followed by a mediating effect model to test the moderating effects of the preference for government innovation and its temporal and spatial heterogeneity.

The paper finds that fiscal decentralization significantly inhibited city innovation, and with the improvement of city innovation level, the inhibition demonstrated characteristics of “V” type variation. When the degree of fiscal decentralization is between 0.377 and 0.600, the inhibition of fiscal decentralization on city innovation level is the weakest. We further show that fiscal decentralization also inhibits the government's preference for innovation, reduces the proportion of fiscal expenditure on innovation and has a negative impact on city innovation. In addition, the influence of fiscal decentralization on city innovation present clear heterogeneity in space and in time. On one hand, the inhibition of fiscal decentralization on city innovation level in eastern China is significantly weaker than that in central and Western China; on the other hand, after the implementation of China’s innovation-driven development strategy in 2013, the negative impact of fiscal decentralization on city innovation disappeared.

The research findings have certain policy implications. That is, in the process of decentralization reform, on the one hand, the central government should strengthen the supervision over the fiscal expenditure of local governments and ensure that the central government can play a leading role in the local development strategy, on the other hand, the central government should guard against the distortion of fiscal decentralization on local governments' fiscal expenditure behavior. In addition, the central government should also focus on the heterogeneity of the impacts of fiscal decentralization on cities under different strategic backgrounds and different levels of innovation.

This paper extends prior research by bringing the decentralization system reform into the study of city innovation system and analyzing its mechanism and its temporal and spatial heterogeneity.

Fiscal fund is the key support of carbon emissions control for local governments. This paper aims to analyze the impact of fiscal decentralization on carbon emissions by spatial Durbin model (SDM), and verify the existence of “free-riding” phenomenon to reveal the behavior of local governments in carbon emissions control.

Based on the provincial data of carbon emissions from 2005 to 2016 in China, this paper uses spatial exploratory data analysis technology to analyze the spatial correlation characteristics and constructs SDM to test the impact of fiscal decentralization on carbon emissions.

The results show that carbon emissions exhibits significant spatial autocorrelation in China, and the increasing of fiscal decentralization in the region will increase carbon emissions in surrounding areas and on the whole. Then, by comparing the impact of fiscal decentralization on carbon emissions and industrial solid waste, it is found that “free-riding” phenomenon of carbon emissions control exists in China.

Based on the spatial cluster characteristics of China’s provincial carbon emissions, carbon emissions control regions can be divided into regions and different carbon emission control policies can be formulated for different cluster regions. Carbon emissions indicators should be included in the government performance appraisal policy, and carbon emissions producer survey should be increased in environmental policies to avoid “free-riding” behaviors of local government in carbon emissions control in China.

This paper contributes to fill this gap and fully considers the spatial spillover characteristics of carbon emissions by introducing spatial exploratory data analysis technology, constructs SDM to test the impact of fiscal decentralization on carbon emissions in the perspective of space econometrics, and tests the existence of “free-riding” phenomenon in carbon emissions control for local governments in China.

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.

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.

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.

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.

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.

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.

The rise of cultural governance has made cultural democracy important in East Asia. South Korea and China have chosen to develop cultural democracy by means of developing community-based cultural houses. Cultural houses in Korea were first managed from the center but have now been decentralized, and those in China have been developed based on local financing and administration. Since central-local intergovernmental relations, as they relate to public culture, have gone untouched in East Asia, the purpose of this paper is to study how central-local intergovernmental relations have impacted the development of cultural democracy in this area, in order to better understand how public culture should be developed.

A comparative study of the cases of South Korea and China has been used. The materials and information collected for the study were gathered by a review and an analysis of extant literature, policy documents, data and other materials from the relevant departments of both countries. It was also based on semi-structured interviews conducted with the national cultural departments, regulatory institutions, and with officials and scholars.

This study shows that central-local intergovernmental relations can have an impact on the management of community-based cultural houses and the effectiveness of cultural democracy’s development. Only complete decentralization that directly invites democratization will provide positive local conditions for cultural democracy’s growth. In short, meaningful governmental responses to local demands and a strong civil society are critical for the advancement of cultural democracy.

This study seeks to provide insights into the relationship between central-local intergovernmental relations and cultural democracy. At the micro project level, cultural project management should be improved; at the medium local level, the public must be made part of any decentralization effort; and at the macro national level, the multiple impacts caused by decentralization need to be considered.

This study is unique in terms of both its research questions and its research area. Central-local intergovernmental relations, as they relate to public culture, have gone comparatively untouched, especially in the context of East Asia. It is in this context that studying how central-local intergovernmental relations impact the development of cultural democracy is worthwhile, in order to better understand how public culture has developed and will be developed in future. A comparative study of the cases of South Korea and China has been used to discover the impacts of different dimensions of central-local decentralization on cultural development.

Decentralization has been a continual focus of attention of both scholars and practitioners for more than half a century. Even though there is a general agreement on what decentralization is, there is no consensus about how it should be measured. This article builds on the existing body of literature that specifies three major dimensions of decentralization: political, administrative, and economic. The article offers a measurement model that unifies these dimensions in a meaningful manner that allows for comparison across countries. The proposed model is then empirically tested using confirmatory factor analysis of a data set of 37 countries over the period 2000-2009. This factor analysis reveals that there are, in fact, only two dimensions of the decentralization process. The newly developed modelʼs index illustrates that the conceptually challenging processes of decentralization can be accurately measured and analyzed. The index can be used for hypothesis testing of the causality role of decentralization.

In the past two decades, much of the literature in the area of government financial management has been devoted to studying the causes of fiscal stress. Most studies emphasized the role of such factors as economic cycles, business relocation and factors beyond the control of policy makers as major causes of fiscal stress. This study extends the scope of the research in this area to investigate whether state and local fiscal structures contribute to fiscal stress. Using a pooled cross-sectional time-series approach with the state-local data ranging from 1982 to 1997, the result shows that: there is more significant difference in the composition of tax structures than that of total revenue; high aggregate spending is associated with high fiscal stress; state and local governments over-commit on the social welfare category; local revenue diversification is associated with low fiscal stress; and fiscal decentralization or high spending responsibility assumed by local governments is associated with low fiscal stress. The findings suggest that local revenue diversification and fiscal decentralization can be used as measures to reduce fiscal stress.