Fiscal centralization: a remedy for corruption?

Public Budget Composition, Fiscal (De)Centralization and Welfare

We present a dynamic two-region model with overlapping generations. There are two types of productive public expenditure, education and infrastructure funding, and governments decide optimally on budget size (tax rate) and its allocation across the two outlays. Productivity of government infrastructure spending can differ across regions. This assumption follows well established empirical eviden...

Fiscal Centralization of Indiana State and Local Government

Archive International aid , corruption and fiscal policy behavior

The Okada & Samreth (2012, EL) and Asongu (2012, EB; 2013, EEL) debate on ‘the effect of foreign aid on corruption’ has had an important influence in policy and academic circles. This paper provides a unifying framework by using investment and fiscal behavior transmission channels in 53 African countries for the period 1996-2010. Findings unite the two streams of the debate and broadly suggest ...

Fiscal Decentralization and Political Centralization in China Implications for Growth and Inequality

China’s current fiscal system is largely decentralized while its governance structure is rather centralized with strong top-down mandates and a homogenous governance structure. Due to large differences in initial economic structures and revenue bases, the implicit tax rate and fiscal burdens to support the functioning of local government vary significantly across jurisdictions. Regions initiall...

Impact of Fiscal Re-Centralization on China’s Regional Economies: Evidence from A Multi-Regional Model

This paper presents a multiregional econometric model of China. The pioneering large-sized model consists of seven blocks with over 1,200 equations. It covers 30 provinces of China for the period from 1985 to 1998. Panel data technique is adopted to estimate behaviour equations. A counterfactual simulation is conducted to assess the impact of fiscal recentralization on China’s regional economie...