Subnational Levels Of Government Research Articles

Great Recession and Fiscal Squeeze at U.S. Subnational Government Level

The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States. It documents the sharp decline in tax revenue and discusses how states responded to close the budget gaps in order to obey the balanced budget provisions. It highligts the procyclical nature of this policy response, provides a brief comparison with subnational policy stances in other advanced economies, and discusses some options for making subnational fiscal policy less procyclical within the framework of current rules.

Great Recession and Fiscal Squeeze at U.S. Subnational Government Level

The paper discusses the fiscal impact of the Great Recession of 2007-08 on state and local governments in the United States. It documents the sharp decline in tax revenue and discusses how states responded to close the budget gaps in order to obey the balanced budget provisions. It highligts the procyclical nature of this policy response, provides a brief comparison with subnational policy stances in other advanced economies, and discusses some options for making subnational fiscal policy less procyclical within the framework of current rules.

Local economic development in sub-Saharan Africa: Defining potential roles for national government

Policy debates around local economic development (LED) are mainly focussed on the role of subnational levels of government. Limited attention is given to the appropriate role of central or national government. Nevertheless, an important set of functions can be assumed by national governments in support of LED programming, not least in furnishing a coherent framework and guidelines for local planning affecting business development. The aim of this article is to offer a critical synthesis of international experience, mainly from OECD countries, concerning the roles played by national government in support of organizing LED initiatives. From international experience, twelve different roles can be discerned. In Africa, the most fundamental in energizing LED processes are improving the national business environment, reviewing national regulatory processes that impede local development initiatives, appropriate support for small business development, enhancing coordination across different government departments, and strengthening the competiveness of cities.

Climate Change Policy Capacity at the Sub-National Government Level

The capacity of large bureaucratic organizations to address climate change issues is an area that many consider to be important yet there is very little empirical evidence available. This article employs a structural equation model (LISREL) from survey data of mid-level public servants in the Province of Alberta, Canada and considers such factors as the extent that they work with climate change information, the use of risk-based tools, risk perception, and broader organizational factors. The results suggest that policy-based staff is more engaged in climate change issues than researchers and are also more likely to employ risk-based tools and techniques. We conclude that structural equation modeling can provide valuable indicators of policy capacity to decision makers who are charged with developing climate change policies.

Good Practice Guide for the Preparation and Revision of Regulation Affecting Economic Activity, Government of Catalonia, Presidency Department, EADOP, Barcelona, 2010.

Despite the initial delay in Spain in the adoption and development of a better regulation policy compared to other OECD countries, in the last few years significant advances have taken place, as pointed out in the 2010 OECD report “Better Regulation in Europe. Spain”.In this context, the initiatives promoted by the Autonomous Communities – Spanish subnational levels of government – are also very important, since they have wide powers for the development of their own public regulatory reform policies. In fact, the first Spanish experience of the introduction of regulatory impact assessment in the legal rulemaking process took place in Catalonia, which has been a pioneer in the integration of administrative simplification policies – applied since the early 90s – in addition to its administrative burden reduction strategy.

Fiscal Decentralization and Government Size in Latin America

Although the region remains highly centralized, the tendency toward decentralization is quite strong. Not only is a larger portion of the general government budget executed from the subnational government level, the autonomy that these governments have in deciding how much to spend and what to spend on is increasing as well. In this context, it is important to analyze the possible effects of the move toward decentralization on fiscal performance.

Property Tax Administration in Francophone Africa: Structures, Challenges, and Progress

In the context of a widespread focus on decentralization in Africa, there exists an imperative to find suitable ways to maximize potential own revenue sources at all sub-national government levels. This need in particular and the need for greater domestic resource mobilization by African states in general, has been exacerbated by the current global financial crisis that has led many countries into recession and left developed and developing countries alike scrambling to find solutions at home. In that regard, it has been widely suggested that property taxes would represent an important, if not the best, source of stable revenue at the sub-national level in both developed and developing countries. This paper analyses property tax systems as practiced in some francophone African countries, by identifying major issues and constraints they face; it also explores avenues to strengthen property tax as a source of national and/or municipal revenue.

The Existing Types of Public and Private Actors for Managing The Rural Development Programs & Facilities in Japan

The implementation of an place-based rural policy requires changes in the intra-governmental relations and between the public and private sectors and civil society. Over the past decades, Japan has been increasingly devolving and decentralizing public responsibilities and resources to sub-national government levels. There is assumption that such transfers produce more efficiency in terms of public management and create better conditions for economic development. At the same time, these transfer respond to new expectations of citizens and civil society to participate more closely in the democratic decision-making process. Coordination is also needed at the local level to integrate sectoral approaches, to involve private partners and to achieve the appropriate geographic scale. Local public and private actors join a partnership and pool knowledge and resources. This type of local partnership is characterized by the participation of different actors, including municipalities, sub-regional government institution and development agencies. The participation of private actors(private firms, cooperatives, associations, non-profit organizations, farm organizations, other categories organizations, etc,) is also important.

Effects of Fiscal Decentralization on Public Sector Growth in Austria

The determinants of the growth of the public sector have drawn significant attention by researchers with an increasing focus on the effects of fiscal federalism. The objective of the paper is to test whether fiscal decentralization contributes to the growth of government expenditure in Austria for the period of 1955 to 2007. The empirical results of this paper suggest that the commonly hypothesized determinants of total government expenditure may bear some explanatory power in Austrian fiscal policies. Government expenditures seem to be determined by GDP with increases of the size of the public sector until about mid-1990s. Expenditures react to active fiscal policies influencing the unemployment rate. There is also some indication of fiscal illusion of policy makers. We find that fiscal decentralization measured by the share of sub-national expenditure to total government expenditure has a dampening effect on total government expenditure, thus corroborating the hypothesis of the efficiency of a federal system. However, decentralization in the Austrian system is mainly attributable to the significant growth of grants from the national to the sub-national levels of government. Our conclusions therefore cannot be generalized in terms of an efficiency advantage of a federal over a centralized system.

Waste management policies for industrial symbiosis development: case studies in European countries

Industrial symbiosis (IS) emerged as a self-organizing business strategy among firms that are willing to cooperate to improve their economic and environmental performance. The adoption of such cooperative strategies relates to increasing costs of waste management, most of which are driven by policy and legislative requirements. Development of IS depends on an enabling context of social, informational, technological, economical and political factors. The power to influence this context varies among the agents involved such as the government, businesses or coordinating entities. Governmental intervention, as manifested through policies, could influence a wider range of factors; and we believe this is an area which is under-researched. This paper aims to critically appraise the waste policy interventions from supra-national to sub-national levels of government. A case study methodology has been applied to four European countries i.e. Denmark, the UK, Portugal and Switzerland, in which IS emerged or is being fostered. The findings suggest that there are commonalities in policy instruments that may have led to an IS enabling context. The paper concludes with lessons learnt and recommendations on shaping the policy context for IS development.

Beyond methodological nationalism, but where to for the study of regional governance?

In this special issue of the Australian Journal of International Affairs, ‘Risk, Regulation and New Modes of Regional Governance in the Asia-Pacific’, it has been argued that new modes of regional governance in the Asia-Pacific region have become embedded within the domestic practices and institutions of states at the national and/or subnational levels of governance, thereby escaping the traditional focus of the international relations literature on regionalism and regional integration. This concluding article examines the three dimensions of state transformation associated with this emergent regulatory regionalism—shifts in the location of state power, the actors exercising state power, and the normative-ideological purpose of the exercise of state power—and identifies issues for further research emanating from the collection of articles in this special issue.

Fiscal Decentralization and Public Sector Employment

This paper investigates the relationship between public sector employment and fiscal decentralization. We develop a theoretical framework modeling the interactions between the central and subnational executives regarding the level of public employment at the central and subnational government levels. In our empirical work, based on a large cross-country dataset, we find that, ceteris paribus, the level of total public sector employees in a country increases with its level of fiscal decentralization. Even though central government employment decreases with decentralization, this is more than fully offset by the increase in employment at the subnational level accompanying decentralization. Our empirical results also indicate that the relationship between GDP per capita and public sector employment is not monotonic but quadratic, that total public sector employment is higher in unitary countries vis-à-vis federal countries, and that public employment increases with the country’s international economic openness.

Sales Taxation in Canada: The GST-HST-QST-RST 'System'

For decades, the conventional view was that one could not impose a standard invoice-credit destination-based value added tax (VAT) at the subnational level of government. Canada's almost two decades of experience with just such a VAT demonstrates conclusively that this view is incorrect. Not only can it be done, but it has been done, and done well. Canadian experience also demonstrates that a federal VAT can work perfectly well in a country in which some subnational units have their own VATs, some have their own retail sales taxes (RSTs), and some have no sales tax at all. There is no apparent reason a similar system should not work equally well in the United States. In this paper, we discuss in detail the Canadian experience with two quite different types of subnational VATs - the Quebec Sales Tax (QST), a tax imposed on essentially the same base as Canada's federal VAT (the Goods and Services Tax, or GST) but administered by the provincial government, and the Harmonized Sales Tax (HST), essentially a provincial VAT imposed on the same base as the federal GST and administered by the federal government. The existence of these two different forms of provincial VAT raises neither technical nor economic problems for the federal VAT. On the other hand, the existence of a federal VAT has apparently spared Canada from many of the VAT evasion problems to which so much attention has been paid in the European Union, which of course does not have any equivalent 'union-wide' VAT to, as it were, shelter the VATs of member states. The evidence is that those provinces that have altered their sales taxes from RSTs to VATs have suffered no bad consequences and reaped some economic gains, so it is not surprising that Canada's largest province, Ontario, has recently announced that it will join the HST system, with some modifications, in 2010. Other provinces may soon follow. The adoption of a federal VAT in the U.S. might similarly induce states that wish to improve their sales taxes to follow a similar path.

Why Do Agencies Work Together? The Determinants of Network Formation at the Subnational Level of Government in Thailand

There is a small, although well-established body of literature examining network performance and accountability. In addition, there are relatively few studies which examine potential factors for determining network formation. The current study provides a systematic analysis of network formation determinants. A logistic regression model is constructed to explain the probability of network formation; five major groups of explanatory variables are included: institutional, programmatic, managerial, political, and socioeconomic. Data for this study were collected between 2003 and 2005 from 411 programs at the subnational governance level of Thailand as part of a larger study on the management of local governments. The analysis shows that the most significant variables in determining network formation include the nature of the programs and management capacity. Local political climate also has a significant effect on network formation, but only indirectly. The study also reveals that collaborations in educational and cultural promotion programs are still restricted, which differs from the experiences in many developed countries. This study illustrates the importance of programmatic, managerial, and political contexts that administrators may consider when forming networks.

Using E-Government to Reinforce Government—Citizen Relationships

A comparison of the United States and China shows that electronic government (e-government) can be used to enhance citizens' access to government as much as government's access to citizens. Both countries are using e-government initiatives as vehicles to improve internal efficiencies and provide better services to their citizens. However, in the case of the United States, e-government also represents an opportunity to infuse business principles into the government— citizen relationship (results-oriented government). In the case of China, e-government represents a means to bring subnational levels of government under greater scrutiny and control of the central government, as it reinforces monopoly control over the government—citizen relationship (transparency with security). Further comparative analysis along three dimensions suggests that although technology can play an important role in fostering the redistribution of power and encouraging interactions between governments and citizens, the notion of government reform carries many different connotations.

Gender-Responsive Budgeting: Moving Women in China Further along the Road to Full Equality

Over the past 25 years, the progress toward gender equity has gained momentum in most parts of the world, and has been galvanized by significant actions taken by the international community of nations. There has also been a growing worldwide awareness that governments’ budget decisions relating to both revenues and expenditures can be critical in promoting gender equity. For example, on the expenditure side of the budget, a government's reduction of agricultural subsidies could impact heavily on women who generally comprise the bulk of farm workers, especially in developing countries. Restoring, or even increasing, the subsidies could increase household incomes, raise agricultural production and improve the quality of life for all villagers. On the revenue side, an income tax rate reduction would primarily benefit men whose incomes are generally greater than those of women. Changing the structure of the tax reduction to, perhaps, a tax credit could result in a more equitable gender distribution of the benefits of lower taxes. Several terms including “women's budgets,” “gender budgets,” “gender-sensitive budgets,” and “gender-responsive budgets” have been used to describe government budgets that incorporate a gender perspective. In my paper, I use the term “gender-responsive budget” (GRB) to define a government budget that explicitly integrates gender into any or all parts of the decision-making process regarding expenditures and/or revenues. I use the term “GRB initiative” to include: (1) the actual integration of a gender perspective into any or all aspects of budget decisions; and (2) an organized movement to influence government to incorporate a gender perspective into its budget decisions. Thus defined, GRB initiatives have been undertaken in more than 60 countries at the national and/or subnational levels of government. The purpose of my paper is to show how the lessons learned in these GRB initiatives can be applied in the People's Republic of China (PRC) where the equal treatment of women is a goal that has yet to be fully realized along most dimensions, including education, health, economic prosperity and political involvement.

A Temporal Analytical Approach to Decentralization: Lessons from Brazil's Health Sector

This article introduces a new concept to the study of decentralization processes: policy dynamism. At its core is the notion that the sequential and temporal process of health decentralization affect the nature of intergovernmental relationships and municipal bureaucratic capacity. Examining the case of Brazil, I argue that the rush to decentralize health services to municipalities has, in the absence of sufficient financial and technical assistance from the federal and state governments, increased state-municipal conflict over the management of health policy, limiting municipalities' ability to increase bureaucratic capacity. Consequently, some states have attempted to recentralize reforms, generating further conflict between both subnational levels of government. While some municipalities have tried to overcome these problems by creating associations and working with international organizations, several bureaucratic obstacles remain. This article attributes these outcomes not to federal institutions and economic constraints (the traditional approach in the literature) but rather to the noninstitutional, temporal policy dynamics of decentralization.

The Limits of Ecological Modernisation in Canada's Atlantic Provinces

This article examines the institutional framework and main policies for the promotion of sustainable development by the Canadian Atlantic provinces of Nova Scotia and New Brunswick. It then discusses how strategies and policy prescriptions recommended by the ecological modernisation concept are guiding sustainable development at the regional level. It reveals that provincial assemblies, sub-national levels of government and other political institutions, as well as civic non-governmental organisations and regionally-embedded economic interests, are developing environmental policies that display wider agendas of ecological modernisation. Finally, the article identifies a number of promising approaches and best practice in ecological modernisation. It concludes that while the Canadian federal system is ambitious in its policy of promoting sustainable development, in practice it has been unsuccessful in delivering its own promise.

Protecting resources for primary health care under fiscal federalism: options for resource allocation

The introduction of fiscal federalism or decentralization of functions to lower levels of government is a reform not done primarily with health sector concerns. A major concern for the health sector is that devolution of expenditure responsibilities to sub-national levels of government can adversely affect the equitable distribution of financial resources across local jurisdictions. Since the adoption of fiscal federalism in South Africa, progress towards achieving a more equitable distribution of public sector health resources (financial) has slowed down considerably. This study attempts to identify appropriate resource allocation mechanisms under the current South African fiscal federal system that could be employed to promote equity in primary health care (PHC) allocations across provinces and districts. The study uses data from interviews with government officials involved in the budgeting and resource allocation process for PHC, literature on fiscal federalism and literature on international experience to inform analysis and recommendations. The results from the study identify historical incremental budgeting, weak managerial capacity at lower levels of government, poor accounting of PHC expenditure, and lack of protection for PHC funds as constraints to the realization of a more equitable distribution of PHC allocations. Based on interview data, no one resource allocation mechanism received unanimous support from stakeholders. However, the study highlights the particularly high level of autonomy enjoyed by provincial governments with regards to decision making for allocations to health and PHC services as the major constraint to achieving a more equitable distribution of PHC resources. The national government needs to have more involvement in decision making for resource allocation to PHC services if significant progress towards equity is to be achieved.

Fiscal federalism in Brazil: An overview

Although the states and municipalities that comprise the Brazilian Federation have considerable autonomy in raising their own tax income and spending public funds, this is not the outcome of a planned decentralization process. The improvement in fiscal indicators at the subnational-government level since the promulgation of the Fiscal Responsibility Act has made a major contribution to the success of the country’s macroeconomic stabilization policy. Nonetheless, the Federation is seen as a major stumbling block for reform of the tax system. As a contribution to the debate on federative balance in the division of fiscal responsibilities, this paper makes a diagnostic study of the federative framework and recent institutional changes, and proposes a new federative agenda.