{"title":"Local government revenue decentralisation and funding divergence: An English case study","authors":"David Phillips, Polly Simpson, N. A. Smith","doi":"10.1787/9789264302488-9-EN","DOIUrl":"https://doi.org/10.1787/9789264302488-9-EN","url":null,"abstract":"For revenues, sub-national governments rely on a mix of grants from central government; locally-raised taxes; and locally-raised user fees and charges. It is not only the balance of these sources, but also the rules around tax and fee policy and fiscal equalisation that affect funding outcomes and the fiscal incentives faced by subnational governments. We use an ongoing shift in England’s local government finance system from equalising grants to a greater reliance on local tax revenues, aimed at incentivising growth, as a case study of the trade-offs between equalisation and incentives inherent in sub-national finance. In particular using data from 2006–07 to 2013–14, we show the significant fiscal disparities between local government units in England, and the factors that correlate with the size and changes in these disparities over time. We model proposed reforms to England’s local government finance system and show that even if revenues are initially fully equalised relative to assessed spending needs, significant fiscal disparities can re-emerge in just a few years. However, the scale of these balances depends significantly on specific design choices such as marginal equalisation for those units seeing the largest shortfalls in revenue, and revenue sharing in areas with two-tier local government.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114182615","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Fiscal federalism in the Russian Federation and its Asian regions","authors":"H. Blöchliger, M. Alexeev","doi":"10.1787/7ab43e02-en","DOIUrl":"https://doi.org/10.1787/7ab43e02-en","url":null,"abstract":"The Asian regions of the Russian federation play a disproportionately important role in the economy of the country. While only about one-quarter of Russia’s population lives in Asia, they produce almost 30% of the country’s gross domestic product (GDP). This chapter describes the intergovernmental fiscal framework in Russia and examines its effects on regional fiscal incentives, economic growth, and inequality, focusing on the Asian regions. The analysis suggests that fiscal incentives, both in the Asian regions and the rest of Russia, generated by the tax assignment policy and transfers from the federal budget are relatively weak. However, explicit fiscal rules aimed mostly at fiscally weak regions enhance fiscal incentives. Although federal transfers do not seem to impede economic growth of the Asian regions, overall transfer dependence and particularly balancing transfers are associated with lower regional growth in the European part of Russia. Transfers do reduce inter-regional inequality with respect to budgetary revenues and expenditures, but the effect is smaller for equalization transfers. The balancing transfers reduce inequality the least and sometimes even increase it. This is true both for the Asian regions and for the country as a whole. Overall inter-regional revenue inequality with and without transfers decreased in 2005-2007, stabilized in 2007-2013, and increased significantly through 2015.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116248050","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Fiscal decentralisation and inclusive growth: The role of institutional context in selected Asian economies","authors":"P. Smoke","doi":"10.1787/67ECA5EA-EN","DOIUrl":"https://doi.org/10.1787/67ECA5EA-EN","url":null,"abstract":"There is increasing interest in the question of whether decentralisation promotes inclusive and equitable development. Evidence is limited and the results are highly variable. The premise of the chapter is that a first step in addressing this question is to document how decentralisation works. Although an important public sector reform in Asia, decentralisation is organized and operates in diverse ways that reflect differences in country characteristics, histories and political economy forces. This chapter briefly examines key aspects of decentralisation in selected Asian countries—the intergovernmental system structure and decentralisation framework, the degree of fiscal empowerment and decision-making autonomy, and the level of accountability reflected in the local political system, among others. Each of these features has potential implications for inclusive development, although how they interact, the results they generate, and their dependence on other public policies may differ across countries. Given the diversity, complexity and information gaps involved, few policy generalisations beyond relatively broad statements can be made. More work is needed to establish an evidence base on the role that fiscal decentralisation—supported by other institutional and political reforms—can potentially play in inclusive development in Asia.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115865989","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Fiscal decentralisation and governance in Thailand","authors":"D. Laovakul","doi":"10.1787/C32C291B-EN","DOIUrl":"https://doi.org/10.1787/C32C291B-EN","url":null,"abstract":"This chapter studies expenditure assignment, revenue assignment and the debt of local governments in Thailand. The distribution of local expenditures and revenue among jurisdictions in 2017 are analysed by applying the Gini index and Lorenz curve. The study shows that the governmental functions that have the most unequal distribution of local expenditure per capita among local governments are agriculture, domestic peace maintenance and commerce. The least unequal distribution of local expenditure per capita is in general administration, central budget and education. Thai local governments collect a very small proportion of their budgets themselves, with around eight percent of their budgets coming from local sources of revenue. This study suggests that the shared revenue and grants are good instruments to reduce the disparity of local governments’ revenue. Moreover, government functions should be defined more clearly, identifying which functions are solely provided by the central government and which functions should be jointly provided by the central government and local governments.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130487995","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Inclusive growth and decentralisation in Korea","authors":"Hyun-A Kim","doi":"10.1787/52D07F4A-EN","DOIUrl":"https://doi.org/10.1787/52D07F4A-EN","url":null,"abstract":"One of the key connectors between inclusive growth and education seems to be fiscal decentralisation. Education equity has long been a significant policy concern, not only in developed but also in developing countries. This chapter points out how the equal distribution of educational opportunities through fiscal decentralisation affects inclusive growth. The empirical findings in this chapter pose some policy-related questions. First, the linkage between income disparities and education inequalities with the definition of student resiliency has been shown. Second, this study suggests that the mitigation of regional disparities may improve income equality. From this point of view, the regional imbalance of demographic and economic infrastructures may worsen income inequality in the highly congested capital cities in many Asian countries. Finally, this empirical study adds to the evidence concerning the relationship between two kinds of redistributive policies for many Asian countries and OECD countries.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"21 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116186832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Public policy for a modernising China: The challenge of providing universal access to education under fiscal decentralisation","authors":"Christine P. W. Wong","doi":"10.1787/68248dec-en","DOIUrl":"https://doi.org/10.1787/68248dec-en","url":null,"abstract":"One of the key inequalities in China today is the divide between urban residents with local registration (hukou) and those without. This chapter examines the historical and systemic causes of this divide between the hukou and non-hukou populations, focusing on the provision of basic education. The limited access to urban schooling for the children of rural migrants is a divisive issue in the debate on citizenship and social rights of migrants, and one with adverse implications for labour markets and intergenerational mobility. This chapter uses the provision of basic education to illustrate how fiscal decentralisation in China – under particular historical circumstances, produced a divisive, rather than inclusive growth outcome. Moreover, even though education policies have shifted over the past two decades to calling for inclusiveness, their impact has to date remained limited, leaving the government with an inequality it does not want and finding very difficult to reverse.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128680859","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"A global view of sub-national governments in Asia: Structure and finance","authors":"Isabelle Chatry, R. Vincent","doi":"10.1787/239E95DB-EN","DOIUrl":"https://doi.org/10.1787/239E95DB-EN","url":null,"abstract":"This chapter provides insights into the potential impact of sub-national government’s involvement in achieving inclusive growth and sustainable development in the Asia-Pacific Region. Based on data collected by a pilot study entitled “Sub-national governments around the world: structure and finance”, it provides a comparative analysis of sub-national government organisation, responsibilities and finances across the 16 selected countries. The preliminary findings highlight the high diversity of the sample in terms of socio-economic characteristics and institutional settings as well as the complex nature of sub-national government structure with many asymmetric situations. They also stress significant fiscal imbalances in the region. While sub-national governments are involved in the provision of a wide range of public goods, services and infrastructure, in particular for social cohesion, they have in practice very limited discretionary power over their revenues, most particularly tax revenues, confirming that fiscal decentralisation is still lagging behind in many countries of the Asia-Pacific Region. This situation delays the empowerment of sub-national governments as key actors in the developing process of their countries, in particular for inclusive growth.","PeriodicalId":350343,"journal":{"name":"OECD Fiscal Federalism Studies","volume":"166 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"1900-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114732909","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}