Local Government and decentralization in the Sudan

The establishment of an effective local government system has been imperative in the Sudan both on account of the vast scale of the country and the decentralization policies of successive governments. District councils were initially established in 1951 following the Marshall Report, but were by stages superseded as budgetary authorities, and reduced to unimportance by the People's Local Government System in 1971, which vested responsibility in Councils at the Provincial level. The subsequent difficulties experienced by this system indicate the value of the District, now renamed Area, as a level for a multipurpose local authority in the Sudan, and explain the reemphasis of this level in the 1981 Local Government Act. This article summarizes the experience leading up to the 1981 Act, and examines the extent to which the new legislation offers an effective structure. The finance of local government, a recurrent problem in the Sudan, emerges as a critical issue, together with the future role of the Provincial Commissioner.     

Political fragmentation, fiscal deficits and political institutionalisation

One line of research finds the size of the deficit to be positively correlated with the number of political actors. This ‘political fragmentation’ hypothesis has been tested on OECD countries. We successfully replicate Volkerink and de Haan’s (Public Choice 109:221–242, 2001) model on an OECD sample. However, when we add ten non-OECD countries, the effect of political fragmentation disappears. We argue that the importance of political fragmentation varies according to the institutionalization of political systems. When we interact the age of a democracy with political fragmentation, we find that legislative fractionalisation increases the budget deficit as a democracy becomes more institutionalised.     

On the link between fiscal decentralization and public debt in OECD countries

Excessive borrowing by subnational governments is considered to be one of the perils of fiscal decentralization. On the other hand, fiscal decentralization might ensure the fiscal stability of the public sector by constraining Leviathan governments. Since the impact of decentralized government on fiscal outcomes is therefore ambiguous from a theoretical perspective, we explore this question empirically with a panel of 17 OECD countries over the 1975–2001 period. Our findings suggest that expenditure decentralization significantly reduces public indebtedness, whereas tax decentralization and vertical fiscal imbalances are insignificant.     

Fighting fiscal corruption: lessons from the Tanzania Revenue Authority

Over the last decade, several African countries have undertaken comprehensive reforms of their tax administrations to increase revenue and curb corruption. This article examines recent experiences in the fight against corruption in the Tanzania Revenue Authority (TRA). Two lessons of broader relevance are highlighted. Firstly, even with relatively high wages and good working conditions, corruption may continue to thrive. In a situation where there is high demand for corrupt services, it is unrealistic to provide tax officers with pay rates that can compensate for the amount gained through bribery. Without extensive and effective monitoring, wage increases may produce not only a highly paid, but also a highly corrupt tax administration. Secondly, hiring and firing procedures may lead to more corruption. Corrupt tax officers often operate in networks, which also include external actors. These corruption networks seem to have been strengthened because many of those fired were recruited to the private sector as ‘tax experts’. This partly explains why the positive process experienced in the initial phase of the new revenue authority was later reversed. Copyright © 2003 John Wiley & Sons, Ltd.     

Recasting German federalism? The politics of fiscal decentralization in post-unification Germany

Why did the ideas of fiscal decentralization gain such political currency in Germany in the late 1990s but meet such a relatively dismal political fate by the Summer of 2001? In answering this question, I propose a framework centered around the interaction of ideas and state institutions to study the politics of fiscal decentralization in advanced democratic nation-states. First, I show that the new set of politically-charged ideas of fiscal decentralization which gained political weight in Germany in the late 1990s were driven by economic problems associated with German unification, the increasing popularity of “fiscal federalism” in German policy circles, and a centerperiphery conflict within German political parties. Second, my analysis explains the political failure of these ideas despite their apparent popularity among political and policy elites. Here, I focus on the role of the upper house of the German parliament in order to explain why these ideas have had such little policy success. After demonstrating that the long-standing tradition of “cooperative” federalism has largely survived German unification, the paper concludes by discussing the potential impact of the European Union’s 1997 Growth and Stability Pact on German federalism.     

How gubernatorial budgetary power and interest groups affect vertical fiscal imbalances in the US states: Focusing on fiscal centralization and decentralization

This study empirically examines the roles of gubernatorial budgetary power and interest groups in vertical fiscal imbalances across US states via a two-step generalized method of moments estimation during a 22-year period (1987–2008). States' share of intergovernmental transfers and the local share of intergovernmental transfers are often affected by interaction between governors and interest groups, as are expenditure centralization and revenue/expenditure centralization. Revenue decentralization and the local share of intergovernmental transfers are frequently influenced by cooperation between governors and interest groups via mutual support. Long-term cooperation and gridlock each influence expenditure centralization, revenue/expenditure centralization, and revenue decentralization. Long-term cooperation is not statistically significant in terms of the state and local shares of intergovernmental transfers; that is, governors and interest groups cooperate in pursuit of short-term benefits rather than long-term results. Long-term political influence also has no impact, affirming a short-term-oriented political viewpoint.     

The impact of fiscal decentralization on economics performance in high-income OECD nations: an institutional approach

This paper examines the impact of public sector decentralization on per capita income. Controlling for differences in institutional arrangements among countries, panel data regressions on a sample of observations from 20 high-income OECD nations spanning the years 1972 to 2005 indicate that decentralization is positively related to income. The empirical analysis shows that institutions consistent with economic freedom enhance the positive income effects of decentralization. Thus, the impact of public sector decentralization is dependent upon a nation??s institutional environment.     

The centralization vs decentralization tug of war and the emerging narrative of fiscal federalism for social policy in India

ABSTRACT

This paper examines the relationship between fiscal federalism and social policy in India through an analysis of the effects of a recent effort to increase fiscal decentralization to state governments on the nature of social policy investment at the sub-national level. Through its analysis, this paper highlights the persistence of a strong centralisation bias in India’s fiscal architecture for social policy. We trace this centralisation bias to the political and administrative dynamics of the federal bargain. The peculiar dynamics of this bargain have created a context where the core goal of centralization – to ensure equity – is undermined while the expectation of decentralization – greater accountability through alignment of expenditure with local needs and preferences, fails to take root. India is thus likely to continue to witness significant regional variation in social policy outcomes, despite a centralised financing architecture.     

Droughts and corruption

Public Choice - Natural disasters are challenges for good governance. That conclusion follows from recent research investigating the effects of natural disasters on one important force hostile to...     

Fiscal decentralization and government size

Numerous studies have attempted to model the possible factors contributing to universal growth in public sectors. This paper analyzes one device that appears capable of controlling some of that growth: fiscal decentralization. The results reported here also support the use of monopoly government assumptions in models of public policy     

Fiscal decentralization and natural hazard risks

At least to some extent due to pressure from international donors, many countries have become more fiscally decentralized the underlying premise being that greater decentralization might improve the provision of local public goods and services. We test this proposition by determining whether relatively more decentralized countries fare better when natural disasters strike in terms of its effects on the population. Overall, we find evidence supporting our maintained hypothesis, though the effect appears much more robust in developing countries.     

Tax decentralization and local government size

This paper investigates the relationship between fiscal federalism and the sizes of local governments. While many empirical studies emphasized that grants encourage the growth of local public spending and local taxes constrain it, they are more silent regarding the effects of different types of tax autonomy. The paper addresses this issue by arguing that tax decentralization as organized on tax bases used only by local governments (tax-separation), rather than on tax-base sharing, would restrain local public expenditures. Using an unbalanced panel of OECD countries, the key finding is that only property taxes—mostly based on a “tax-separation” scheme—seem to favor smaller local governments. Thus, while tax decentralization is a necessary condition for limiting the growth of local governments, it does not appear sufficient, as tax-separation schemes among government levels would in fact be required.     

腐败的发生机理及腐败风险的预警

腐败的本质是权力的滥用和异化,腐败的发生具有其内在机理。权力是腐败发生的根本性基础,制度或体制的缺陷是腐败发生的客观条件,腐败动机和成分分析是腐败发生的决定性因素。预防腐败的重点是能够发现腐败的苗头、把握腐败的发展趋势。因此,构建腐败风险预警机制就十分必要,腐败风险防范机制、发现机制和警示机制构成了腐败风险预警机制的基本结构。结合教育、制度、监督等反腐败途径,以预防腐败为工作重点,依据腐败行为的发生过程,科学设定腐败风险预警机制的运行程序,保证预防腐败行为的发生和蔓延。     

Tax complexity and fiscal illusion

By using the Hirschman-Herfindahl index (HHC) the traditional approach to the tax complexity hypothesis introduces a restriction into the fiscal illusion model which has no theoretical foundation. We analyse the existing framework of the tax complexity hypothesis in detail and propose to capture this complexity through a Hannah and Kay index. We extend the theoretical framework by considering the expected return on investment in information. The empirical tests show that the HHC overestimates the importance of size inequalities between different taxes, while underestimating the impact of the number of taxes as a source of informational costs. The expected revenue hypothesis is not supported.     

The Congress and fiscal policy

Although the common belief is that the Congress has paid little attention to fiscal policy, the same kinds of political-economic models which have been used to explain presidential budgetary policy may be used equally well to explain congressional budgetary behavior. The Congress' fiscal policy appears to be systematically sensitive to both economic and political factors. Changes in the unemployment rate have a major impact on congressional budgetary policy. As for political factors, the President's lead is followed most closely on revenue proposals and not at all on the expenditure side. The electoral cycle, in particular the off-year congressional election year, is also important; inducing larger deficits and smaller increases in revenues. When the influences on congressional fiscal behavior are compared with those on presidential behavior, the sources of the generally more expansionary congressional fiscal policy are identified. Congressional budget deficits increase in response to increased rates of unemployment but are insensitive to increases in inflation. In contrast, presidential budgets are heavily influenced by inflation and the growth in personal income — increases in each resulting in smaller proposed deficits — as well as by unemployment rates. In years in which both unemployment and inflation are increasing, the combination of the two (assuming a one percentage point change in each) implies an increase in the congressional deficit of $6.7 billion but a decrease in the president's proposed deficit of $2.5 billion. The implications of this study are a challenge to the literature which makes the President the central actor in macro-economic policy.