Financial Autonomy Of Local Governments Research Articles

Financial autonomy in Spanish local governments: Empirical evidence of beta and sigma convergence

Territorially, Spanish public administrations are organized into State Administration, Autonomous Community Administration, and Local Administration. Local government has the closest contact with citizens and therefore the powers and decisions taken by local institutions have the greatest impact on the social welfare of citizens. To ensure this well-being, it is necessary to analyze and pay attention to the administrative and financial autonomy of local governments. Financial autonomy translates into the capacity of local entities to govern their respective finances, determining, within certain limits, the level of the volume of their own resources and organizing their expenditures. In this work, we study the Financial Autonomy Indicator, which aims to determine the tax resources available to the local entity. Taking into account that Spanish municipalities have, depending on their population size, different obligations when providing services to citizens, the convergence of financial autonomy is studied to detect whether there are common trends by applying the techniques of β-convergence and σ-convergence. It is analyzed whether municipalities starting from lower indicators achieve higher growth over time ( β-convergence), and whether dispersion between municipalities is reduced ( σ-convergence). Points for practitioners Local autonomy grants local entities the freedom to manage their own interests within the State's legal framework. Greater economic diversity and the ability to raise more money on their own through taxes, fees, and other sources characterize larger communities. They have a wider tax base thanks to their higher economic diversification, which opens up more opportunities for revenue collection. The speed of convergence is highest in the smallest municipalities. Knowing whether there is convergence or divergence in financial autonomy can help policy makers.

CONFLICTS OF INTEREST BETWEEN LOCAL GOVERNMENTS AND CENTRAL LEGISLATION – HOW FINANCIALLY INDEPENDENT CAN LOCAL GOVERNMENTS BE

Rights and responsibilities of local governments are defined by the central legislature, in accordance with the given country’s rules, traditions, institutions of constitutional and administrative law. To perform public duties they need financial resources, incomes and wealth. Above these, the right of disposition, financial and economic autonomy have to be provided, moreover, the possibility to receive suitable subsidies from central budget. The proportion and guarantees of the income are important too, as the autonomy of local governments depending from central subsidies may be injured. The question of primary importance is that where are the limits of the mentioned autonomy, protected by various constitutional provisions and international legal documents, how the legislature is able to control the law of taxation, to enter transactions that give rise to debts, or how to withdraw different resources from local governments. The central withdrawal and reallocation of resources may raise the issue of local government solidarity. As well as the extent to which the property and income of local governments can be limited. According to the practice of the various constitutional courts and the supreme courts (American, French, German and Hungarian judicature), the rights and authorities of local governments are not unlimited. Although, local governments have to get effective protection, but after all it is the state who determines the content and the framework of relevant legal regulations for local governments. Therefore, within the constitutional framework, the central legislature has a serious opportunity to intervene in protected autonomy by withdrawing or reallocating revenues, assets or subsidies. The research method of the study is primarily financial and administrative legal analysis and legal comparison: in addition to international, constitutional and legal (American, German, French, Hungarian) rules, the basic characteristics of local government financial autonomy are presented based on the principles worked out in various Supreme Court and Constitutional Court decisions elements, as well as the limitations that said autonomy must face as a result of the decisions of the central legislature. The subject of the research is the financial autonomy of local governments and its legal limitations, which point out that autonomy - unfortunately, cannot be unlimited. Local taxation, own revenues and subsidies can indeed provide adequate foundations for independent local government management, however, since local governments must adapt in the state’s central system of public administration and public finances, therefore, within the constitutional framework, the central legislation can make decisions that adversely affect their incomes, budgets and assets.

Role of foreign direct investment and fiscal decentralization on urban haze pollution in China

Government management is the main tool to solve environmental pollution. Considering the unique fiscal decentralization institution in China, this paper investigates the effect of foreign direct investment (FDI) on urban haze pollution in China from the perspective of spatial econometrics. The Generalized Spatial Two Stage Least Squares (GS2SLS) method is employed to treat the spatial correlation of air pollution. Based on a panel dataset comprising 276 Chinese cities during 2004–2018, we find a positive effect of FDI on urban haze pollution. For one standard deviation increase in FDI, the average annual PM2.5 concentration increase by 1.5%, ceteris paribus. Evidence also suggests that this effect varies across regions with different levels of fiscal decentralization. Through the test of the moderating effect and the threshold effect, we found that the higher of the fiscal decentralization, the weaker of the impact of FDI on haze pollution. This study proposes a new solution for sustainable development: increasing the financial autonomy of local governments to restrain the attraction of non-cleaner investment.

Financial Autonomy of Local Governments in the Slovak Republic: A Panel Data Investigation

Financial Autonomy of Local Governments in the Slovak Republic: A Panel Data Investigation

Avrupa Yerel Yönetimler Özerklik Şartı’na Türkiye’nin Koyduğu Çekincelerin Yeniden Değerlendirilmesi

Avrupa Yerel Yönetimler Özerklik Şartı’nda genel olarak yerel yönetimlerin idari, siyasi ve mali özerkliklerinin gerçekleştirilmesi, korunması ve kamu hizmetlerinin vatandaşlara en yakın yönetim birimlerince yerine getirilmesi çerçevesinde yerel yönetimlerin daha etkin bir hâle kavuşturulması amaçlanmaktadır. Şart’ın en önemli özelliği yerel ve mali özerklik konularını içererek yerel yönetimleri daha güçlü bir hâle getirmesidir. Türkiye de bu Şart’ı onaylamıştır. Ancak Türkiye Şart’ın bazı paragraflarına çekinceler koymuştur. Bu çalışmada, Türkiye’de kamu yönetiminde gerçekleştirilen reformlarla birlikte Şart’a koyulan çekincelerin mevcut durumu ele alınmaktadır. Çalışmanın amacı, Türkiye’nin Avrupa Yerel Yönetimler Özerklik Şartı’na hangi hususlarda çekinceler koyduğunun sebepleri ile birlikte ortaya koyulmasıdır. Çalışmanın gerçekleştirilmesinde içerik analizi yönteminden yararlanılmıştır. İçerik analizinde Avrupa Yerel Yönetimler Özerklik Şartı ve Ek Protokolü esas alınmıştır. Bu kapsamda, Türkiye’nin çekince koyduğu; yerel özerklik, idari özerklik, yerel sorumlulukların kullanılması, yerel yönetimlerin denetimi, mali kaynakların kullanılması, yerel makamlara danışılma, hibelerin şartlı yapılmaması, uluslararası iş birliği yapma hakkı, yargı yoluna başvurma hakkı ile birlik kurma ve birliklere katılma hakkı ayrı ayrı değerlendirilmiştir.

Local Taxes Efficiency in the Context of Regional Socio-Economic Development

Development of regions is one of the priority areas of state regional policy, which purpose is to create appropriate conditions for dynamic, balanced socio-economic development of Ukraine and regions, improving living standards, ensuring compliance with state-guaranteed social protection for each citizen and elimination of main regional imbalances. Ensuring competitiveness and socio-economic development of regions is a prerequisite for growth in the local and national economies. The impact of increasing the financial autonomy of local governments primarily depends on their financial provision. One of the primary sources of local revenues is local taxes and fees, which enhance the efficiency of using budget instruments for the socio-economic development of administrative units. The main contribution of the research lies in the testing of the hypothesis of existing relationship processes between local taxes and indicators of regional development based on panel data analysis for all regions of Ukraine using the regression model in Stata SE and MS Excel. The research period covers 2018–2020. The dataset includes parameters of local tax revenues and indicators of regional development. To substantiate the role of local taxes in regional development, a set of hypotheses about the relationships between local tax revenues and regional development dynamics were specified. In the process of calculations, 18 regression equations (ordinary least squares panel regression method) were created, which allow estimating the impact of local taxes on the general indicators of regional development. Calculations results proved that local taxes have a significant positive effect on ensuring the growth in regional social and economic development indicators. This creates a background for enhancing the financial capacity of local budgets due to the improvements in the local tax system.

Impact of state joint local government account (SJLGA) on the capacity of some selected local government councils in Borno state to execute capital projects

The creation of State Joint Local Government Account (SJLGA) was primarily to serve as a medium through which funds from the federation account are disbursed to local governments for developmental purposes. However, in spite of increased efforts through allocation there are still major gaps to be filled in the area of service delivery at the local government level. The study adopted the survey research where both primary and secondary data were sourced. Data were presented on tables using frequency counts and simple percentages. A total of 800 questionnaires were administered randomly on respondents out of which 400 to local government staff and 400 to community leaders, 353 for community leaders and 344 from local government staffs were retrieved as valid and used for data analysis. Meanwhile, Spearman Rank order, an inferential statistical tool was used to test the hypotheses. The study revealed that the operations of joint account has not significantly improved the performance of local governments in the execution of capital projects in key areas of primary health care, primary education, agriculture and rural infrastructure. The study concluded that State Joint local government account has not significantly improved the performance of selected local government councils in service delivery in Borno state. It was recommended among others that State Joint local government account should be scrapped so as to ensure financial autonomy of local governments in Borno state. It is only then that service delivery can be greatly improved at the local government level.

ШЛЯХИ ПОКРИТТЯ ВИДАТКІВ МІСЦЕВИХ БЮДЖЕТІВ ВЛАСНИМИ ДОХОДАМИ ПРИ МОДЕРНІЗАЦІЇ ФІСКАЛЬНОЇ ПОЛІТИКИ

The modernization of fiscal policy consists in the redistribution of powers to make administrative decisions in the fiscal sphere between central and regional public authorities. Fiscal policy modernization aims at ensuring financial autonomy of administrative and territorial units by reducing interdependent transfers. Financing own-source expenditures is the main criterion for local budgets autonomy. The purpose of the article is to develop ways to cover local budget expenditures with their own revenues while modernizing fiscal policy in Ukraine. The article explores the main ways of covering local budget expenditures with own revenues in the context of fiscal policy modernization, which are capable of ensuring the extension of financial autonomy of administrative and territorial units in Ukraine. The necessity to deepen the reform of financial decentralization in order to modernize the regional fiscal policy to expand the sources of own financial resources formation and optimize the expenditures of local budgets is substantiated. During 2014-2017 it was possible to increase the level of local budget expenditures covering with own revenues by 7%. It is proved that in order to increase the level of local budgets expenditures coverage with own revenues it is necessary to create favorable preconditions for the increase of population incomes. Since a 1% increase in household income causes a 0.21% increase in the level of local government expenditures. Another important area for extending the financial autonomy of local governments is to create conditions for reducing the labor emigration flow. After all, increasing the population of the region by 1% leads to an increase in the level of local budgets expenditures coverage with own revenues by 0.37%. Prospects for further research lie in the development of optimization models to increase the level of local budgets expenditures coverage with own revenues.

Topsis Technique in Self-Government – Case Study of Košice Region

In the last decades, most of the democratic countries have reallocated tax revenues from collected taxes between the state budget and local government budgets. It is possible to monitor the effort to increase the relative financial autonomy of local governments, to strengthen own revenues of local self-government and to increase the autonomy of decision-making bodies regarding their use. The manuscript focuses on usage of TOPSIS technique as a tool for comprehensive evaluation in self-government in Slovakia. 8 criteria were used and their weight was calculated based Fuller triangle method and 25 experts. Based on this analysis, it is possible to recommend this method for usage not only in public sector, but also in private sector as well. Its use is also conditioned by the appropriate selection of the monitored indicators and their weighting, which significantly determines the overall results.

FEATURES OF INTERGOVERNMENTAL RELATIONS IN THE CONTEXT OF ACHIEVING FINANCIAL VIABILITY OF LOCAL COMMUNITIES

Introduction. In the conditions of the implementation of the government’s decentralization reform, local communities received the real opportunities for increasing the resources which can be used for development. One of the conditions, which provides their economic development, is to create an effective system of intergovernmental relations, aimed to optimizing fiscal decentralization and clear definition of the powers of local government. The increasing interest to the problem of expanding of local communities financial capacity caused by the necessity to find improved mechanisms for incomes separation between the elements of the budget system and types of budgets. Purpose. The purpose of this article is to study of intergovernmental relations in the context of achieving financial viability of local communities and to summarize the preliminary results of the reform. Results. The features of intergovernmental relations in local government reform in Ukraine are highlighted. The fiscal innovations, which extends the autonomy principles of local budgets, reallocates expenditure responsibilities between levels of government and creates conditions for intensification of the process of voluntary association of municipalities, have been analyzed. The first phase of fiscal decentralization in Ukraine has been estimated. It has been shown that despite the strengthening of the solvency of local budgets, the negative trends is intensified: excessive centralization of budgetary decisions; imperfect distribution of functional responsibilities and rights between the central and local governments; low human resource capacity of the community; low financial autonomy of local government and so on. The risks of the further deepening the fiscal decentralization have been justified. Conclusions. It was suggested the directions for increasing financial capacity of local communities in the introduction of industry standards of public services, which should increase the efficiency of planning and using of public funds at all levels; in the improving the basic and reverse subsidies calculations and in the estimation the risks of the fiscal decentralization.

International experience of budget adjustment of socio-economic development of regions

The article analyzes the intergovernmental relations in the world and their impact on the socio-economic development of regions. Determined that the public policy of the EU aims to increase the competitiveness of each region and the level of socio-economic development of the poorest regions. For the purpose of socio-economic development to the executive branch of local government powers entrusted to implement the budget. The main feature of these activities is the accumulation of revenue to cover the costs budgeted. Established that the growth and structure of income and expenditures of local budgets in different countries vary, reflecting the degree of financial autonomy of local governments and regions dependent on funds from the state budget.

(Financial Autonomy of Local Government and its Survival in Modern Constitutional System)

Serbian Abstract: У савременим политичким системима, у којима се све чешће говори о отуђењу власти од грађана, локална самоуправа игра несумњиво велику улогу у партиципацији грађана у јавним пословима, чинећи тако значајан коректив посредне демократије и фактичке немогућности грађана да непосредно учествују у доношењу важних одлука од општег интереса. О значају локалне самоуправе сведочи чињеница да је она готово у свим државама уставна категорија, као и да је законима детаљно, а уставима начелно, гарантована њена финансијска аутономија, у најширем смислу. Али, неопходно је анализирати како се та финансијска аутономија у стварности реализује и колико довољност или недовољност прихода приспелих из аутономних и гарантованих извора утиче на положај и опстанак локалне самоуправе. English Abstract: In modern political systems, in which increasingly speaks of the alienation of power from the people, local government undoubtedly plays a major role in the participation of citizens in public affairs, thus making an important corrective to direct democracy and factual inability of citizens to directly participate in making important decisions of general interest. The importance of local self-government evidenced by the fact that she's in almost all the states a constitutional category, as well as the laws in detail, and the Constitution in general, guaranteed its financial autonomy, in the broadest sense. But it is necessary to analyze how the financial autonomy of reality and realize how the sufficiency or insufficiency of the received income from autonomous and guaranteed sources affect the position and the survival of local government.

La recaudación fiscal y su importancia para los Municipios de México

El federalismo hacendario se refiere a la distribución de los recursos públicos entre la federación, los estados y los municipios. Desde 1998 queda establecido el Fondo de Aportaciones Federales o Ramo 33, que tiene como finalidad el fortalecimiento de los estados y municipios, pero que menoscaba a autonomía financiera de los gobiernos locales, principalmente de los municipios. También los gobiernos locales reciben recursos de las llamadas Participaciones Federales, o Ramo 28, los cuales se entregan a las entidades federativas para compensarles su aportación económica a la nación. El federalismo fiscal consiste en la distribución de facultades tributarias entre la federación, los estados y los municipios. A pesar de que la constitución establece el sistema de competencias concurrentes en la materia, las leyes y los convenios transfieren la mayor parte de las atribuciones fiscales al gobierno federal. Otra fuente de recursos de los municipios, y que además resulta exclusiva, lo que indica un gran potencial como fuente de ingresos propios, es el impuesto predial, cuyo fundamento constitucional se encuentra en el artículo 115. Sin embargo, México es uno de los países de la Organización para la Cooperación y el Desarrollo Económico (OCDE) con menor nivel de recaudación sub-nacional, el promedio de ingresos propios de los municipios mexicanos es de a tan sólo el 10%.

Local government financial autonomy in Nigeria: The State Joint Local Government Account

This paper addresses the statutory financial relations and financial autonomy of local government in Nigeria, and the freedom of local government to generate revenue from its assigned sources without external interference. It focuses particularly on a financial instrument called the State Joint Local Government Account (SJLGA) and how its operations have positively or negatively affected the financial autonomy of local government councils and the inter-relations between state and local government in Nigeria.