Impact Of Fiscal Decentralisation Research Articles

Fiscal decentralisation and renewable energy development: Inhibition or promotion?

In line with global green development and decarbonisation initiatives, China has prioritized renewable energy advancement in recent decades. Given the critical role of financial support, scholarly attention has increasingly focused on the impact of fiscal decentralisation (FD) within this sector. This study investigates FD's effect on renewable energy development, analyzing data from 30 Chinese provinces between 2008 and 2022. Findings reveal that FD tends to impede renewable energy progress. Specifically, a one-standard-deviation increase in FD leads to a decrease of 23.1775 % of a standard deviation in renewable energy development. However, this hindrance can be mitigated by foreign direct investment and central transfer payments, while research and development intensity exacerbates the negative impact. Notably, regions with limited natural resources, weaker environmental regulations, fiscal transparency, high marketisation, energy demand, and vertical fiscal imbalances experience a more pronounced decentralisation-renewable-energy relationship. Anti-corruption campaigns in China can alleviate but not reverse this effect. Furthermore, the diffusion of technology and cooperative efforts in nearby regions positively influence renewable energy development. Nonetheless, overall effects still turn out negative due to competition among local governments under the FD framework. Based on these findings, policy recommendations for accelerating renewable energy development are summarized.

A study of the impact of digital technology on industrial ecologisation in the Yellow River Basin of China

The Yellow River Basin is an important ecological barrier and economic core area in China, with problems such as fragile ecological environment and ecosystem degradation, and promoting industrial ecological transformation in resource cities is an important way to protect and improve the ecological and logical environment of the Yellow River Basin. Using panel data of 35 resource-based cities in the Yellow River Basin from 2012 to 2021, the impact of digital technology on industrial colonisation is empirically explored. The study finds (1) digital technology has a driving effect on the industrial ecological transformation of resource-based cities in the Yellow River Basin, and can be a new production tool to stimulate economic vitality; there is obvious regional heterogeneity in the impact of digital technology on industrial ecology, which significantly promotes the industrial ecological transformation of mid-stream and declining resource-based cities, and the facilitating effect is more obvious for declining resource-based cities. (2) From the moderating effect, fiscal decentralisation positively moderates the non-linear relationship between digital technology and industrial ecology. (3) From the perspective of threshold effect, the impact of digital technology on industrial ecologisation has a double threshold effect based on fiscal decentralisation, i.e. at the early stage of digital technology development, a reasonable degree of fiscal decentralisation can significantly promote the industrial ecological transformation of resource cities, but after the development of digital technology to a certain extent, the impact of fiscal decentralisation on industrial ecologisation will be gradually weakened, and will even bring negative effects to industrial transformation. Therefore, improving the development system of digital technology, giving the government moderate financial autonomy, and at the same time adhering to the local conditions and exploring the ecological development road in line with the characteristics of resource cities in the Yellow River Basin have positive significance for the industrial ecological transformation of resource cities in the Yellow River Basin.

Innovation with Chinese characteristics: theory and practice

Purpose This is a special issue of Chinese Management Studies and this study aims to engage with debates on innovation in China and to provide new insights for innovation research in the context of China, seeking to develop a greater understanding of the concept of “innovation with Chinese characteristics”. Design/methodology/approach This study reviews the Chinese innovation management literature in general and the selected papers in this special issue in particular and proposes two new directions for future research. Findings The nine papers that constitute this special issue present research on important aspects of innovation in China, ranging from the effectiveness of government subsidisation for innovation, the impact of fiscal decentralisation on innovation, the role of management behaviour in promoting (or discouraging) innovation and the effects of differing business models on innovation. These papers shed valuable new light on the theory and practice of innovation in China. The papers are discussed in the context of four primary arguments about innovation management in China identified from the broader literature in the field. These relate to the pattern of China’s innovation performance over time, the reasons for its effectiveness, the role of alliances and influences of indigenous factors. It is also shown that management of the internationalisation of innovation and of efficient internal innovation are two important directions for future research on Chinese innovation in an era of de-globalisation. Originality/value The studies presented here provide valuable contributions to theory building in innovation research, as well as some important ideas for directions of future research on innovation in China in the new era of de-globalisation.

The Impact of Fiscal Decentralisation on Local Economic Development in Serbia

Serbia is a transition country that has experienced strong negative spillover effects from the global financial crisis and the subsequent eurozone debt crisis. At the same time it is a candidate for accession to the European Union. Success in local economic development is likely to affect prospects for economic recovery and a successful EU integration process and the paper analyses the contribution of fiscal decentralisation to successful local economic development. The analysis is based upon a cross-section time-series regression model that reveals a positive impact of local public expenditure on economic development. Expenditure on education has a particularly strong effect on local economic development, as does investment per capita from both public and private sources. The conclusion of the paper is that local economic development has been enhanced by the fiscal decentralisation that has taken place in Serbia.

The Impact of Fiscal Decentralisation on Local Economic Development in Montenegro

The goal of the paper is to determine the extent to which local governments in Montenegro have managed to direct their increasing fiscal autonomy towards supporting local economic development. Our analysis of local business support programmes has shown that local governments have space to improve their business environments and business support programmes. Econometric analysis of data for 21 municipalities for 2007-2014 period, showed that the increase of own-source and shared revenues has a positive impact on local economic development. However, these findings are insufficient to conclude the extent to which decentralisation influences economic development and identify channels whereby it exerts this influence.

Impact of Fiscal Decentralisation on Human Development: A Case Study of Pakistan

Fiscal decentralisation refers to the transfer of authority and responsibility from central government to sub-national or the local government. It is mostly pre-assumed that fiscal decentralisation can play important role in the efficient allocations of resources and improvement of the political, economic and social activities. Many studies unlock the relationship between federal government and sub-national governments or local government. Fiscal decentralisation theories mostly based on Richard Musgrave’s (1939) functions of government. He defined three roles: stabilisation, allocation and distribution whereas, only the allocation function seems to be appropriate to fiscal decentralisation theory. Because these three functions are not equally suitable for all level of governments and it is necessary for efficiency that each function is properly matched to the level. It is a step forward towards more responsive and efficient governance if the decentralisation is done properly [Oates (1972)]. The logic behind fiscal decentralisation is accountability and efficiency; the smaller organisations are more fragile for accountability than the larger ones. However, decentralisation has not always been effective in the provision of service delivery and hardly accountable due to lack of community participation. If there is no spill over effects and in the absence of diseconomies of scale it could be effective and efficient. The sub-national governments where the externalities are internalised and scale economies are acceptable fiscal responsibilities should be assigned [Rodden, et al. (2003)]. The sub-national governments are much closer to the people and they are better informed to respond according to their demands of goods and services [Hayek (1945); Qian and Weingast (1997)]. Service deliveries are highly dependent on transfers from central governments. It is necessary to increase the revenue autonomy of sub-national governments and it is linked with the service delivery in social sector [Elhiraika (2007)]. Lower level of governments is closer to the people and much aware of the preferences of localities. Service deliveries should be located at the lowest level because decentralised provision of services increases the economic welfare [Oates (1999)].

The Impact of Fiscal Decentralisation on Education and Other Types of Spending

Scholars have argued about the impact of fiscal decentralisation on public spending for a long time without coming to any firm theoretical and empirical conclusions. In contrast to earlier studies, this paper looks at the impact of fiscal decentralisation across different types of spending. The conventional wisdom of a “race to the bottom” in taxes and spending as a consequence of fiscal decentralization is juxtaposed to the recent literature on expenditure competition, which posits that expansive local competition results in higher spending in fiscally decentralized countries. We argue that the effects of fiscal decentralization should be seen most clearly for those types of policies which are provisioned mainly on the local/regional level. Empirically, we find a robust and positive association between fiscal decentralization and aggregate levels of education spending. However, when looking at public policies provided at the national level (e.g. pension policies), fiscal decentralisation is associated with lower levels of aggregate spending. The argument is tested empirically by means of cross‐sectional regressions as well as a pooled time series analysis of education, pension, social and total public spending in OECD countries from 1980 to 2001.

The Impact of Fiscal Decentralisation on Education and Other Types of Spending

Scholars have argued about the impact of fiscal decentralisation on public spending for a long time without coming to any firm theoretical and empirical conclusions. In contrast to earlier studies, this paper looks at the impact of fiscal decentralisation across different types of spending. It is argued that the impact varies and can be positive or negative, depending on the distribution of spending across levels of government. A simple model is developed to show that local competition in the provision of local/regional public goods (e.g. education) can result in higher spending. However, when public goods are provided at the national level (e.g. pension policies), fiscal decentralisation encourages local policy pre-emption, thus lowering spending. The model is tested empirically by means of a pooled time series analysis of education, social spending and public spending in OECD countries from 1980 to 2001.

Dezentralisierung in den EU-Staaten und r�umliche Verteilung wirtschaftlicher Aktivit�ten

Abstract: This article deals with the impact of fiscal decentralisation on the spatial distribution of economic activities in EU regions as well as with the effectiveness of the European Union's regional policy aiming at economic and social cohesion among its Member States. After a short discussion on concepts and measurement issues of fiscal decentralization two empirical analyses show that the level of sub-national autonomy, considering primarily decisions on local and regional tax income, tends to reduce the degree of regional production specialization in 200 NUTS2 regions while it enhances the effectiveness of the structural funds in 13 EU Member States.

Fiscal decentralisation and IDC economic growth: An empirical investigation

The impact of fiscal decentralisation on LDC economic growth and development is widely debated in the development literature. Notwithstanding this, there has been little attempt to test systematically this relationship. Accordingly, in this note we present an empirical examination of the relationship between the level of fiscal decentralisation and economic growth rates across a sample of twenty‐three LDCsfrom 1974 to 1991. We fail to find, however, any strong, systematic relationship between the two among our sample of LDCs.