Fiscal Federalism and Long-Run Macroeconomic Performance: A Survey of Recent Research

2011 ◽  
Vol 29 (2) ◽  
pp. 224-243 ◽  
Author(s):  
Lars P Feld ◽  
Jan Schnellenbach
Keyword(s):  
Fiscal Federalism ◽  
Macroeconomic Performance ◽  
Long Run

scholarly journals Fiscal federalism and accountability in Nigeria: an ARDL approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olabanji Olukayode Ewetan ◽  
Romanus Osabohien ◽  
Oluwatoyin Augustina Matthew ◽  
Abiola Ayopo Babajide ◽  
Ese Urhie
Keyword(s):  
Public Sector ◽  
Fiscal Federalism ◽  
Local Economic Development ◽  
Fiscal Decentralization ◽  
Secondary Data ◽  
Law And Order ◽  
Content Type ◽  
Distributed Lag ◽  
Long Run ◽  
Auto Regressive

Purpose The purpose of this paper is to examine the relationship between fiscal federalism and accountability in Nigeria. Corruption is a global plague and is endemic in nature. Several policies have been adopted by the Nigerian Government to institutionalize accountability and combat the scourge of corruption that have hindered socio-economic progress but to no avail. Design/methodology/approach Thus, this study examined fiscal federalism and accountability issues in Nigeria using secondary data and used the auto-regressive distributed lag econometric technique to analyse the data. Findings The results from this study reveal that fiscal federalism fails to mitigate corruption in the long run in Nigeria because of poor bureaucratic quality (BQ) and ineffective law and order (LOR). Social implications Fiscal decentralization must be accompanied by legislations that will strengthen BQ of fiscal institutions at subnational levels and promote effective LOR. Originality/value This study recommends that for fiscal federalism to mitigate corruption in the long run, government must adopt appropriate policies to improve BQ and further strengthen LOR in Nigeria. The finding also suggests that to promote public sector accountability in Nigeria, government should ensure the simultaneous decentralization of expenditure and revenue to lower tiers of government. This study provides detailed empirical evidence that fiscal decentralization without accountability will accentuate public sector corruption, and in the long run, weaken local economic development initiative to boost growth and development.

scholarly journals COVID-19, Fiscal Federalism and Provincial Debt: Have We Reached a Critical Juncture?

2020 ◽  
Vol 53 (2) ◽  
pp. 279-285 ◽  
Author(s):  
Kyle Hanniman
Keyword(s):  
Fiscal Federalism ◽  
Debt Crisis ◽  
Fiscal Sustainability ◽  
Fiscal Rules ◽  
Critical Juncture ◽  
Fiscal Capacity ◽  
Long Run ◽  
Canadian Federalism ◽  
The World

In 2019, Canada's gross subnational debt to GDP was well over 40 per cent, easily the highest in the world (see Figure 1). This level will only grow as the provinces grapple with the pandemic and its fiscal effects. Some believe surging provincial debts have brought Canadian federalism to a critical juncture: they have greatly increased the odds of federal measures to stabilize provincial finances. This article assesses this claim. The cleanest and most balanced path to fiscal sustainability is a combination of enhanced federal transfers, which would bolster provincial fiscal capacity, and national fiscal rules, which would constrain provincial borrowing. But the former is unlikely to restore sustainability on its own, and the latter would require a severe provincial debt crisis, which Canada's existing fiscal federal structures can avoid. COVID-19 has increased the odds of certain reforms, and it is difficult to predict their long-run effects. But any obvious paths to fiscal sustainability remain hidden.

Sustaining Long-Run Growth and Macroeconomic Stability in Low-Income Countries—The Role of Structural Transformation and Diversification

Policy Papers ◽  
2014 ◽  
Vol 2014 (38) ◽  
Author(s):  
Keyword(s):  
Structural Transformation ◽  
Low Income ◽  
Low Income Countries ◽  
Macroeconomic Performance ◽  
Export Structure ◽  
Long Run ◽  
Trading Partners ◽  
Per Capita

Diversification and structural transformation play important roles in influencing the macroeconomic performance of low-income countries (LICs). Increases in income per capita at early stages of development are typically accompanied by a transformation in a country’s production and export structure. This can include diversification into new products and trading partners as well as increases in the quality of existing products.

Werkgelegenheid en economische groei: Duitsland als voorbeeld voor Europa?

2012 ◽  
Vol 28 (2) ◽  
Author(s):  
Freddy Heylen ◽  
Tim Buyse
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Full Employment ◽  
Export Performance ◽  
Macroeconomic Performance ◽  
Wage Formation ◽  
The Past ◽  
Long Run ◽  
German Model

Employment and economic growth: is Germany an example to Europe? Employment and economic growth: is Germany an example to Europe? In this article we describe and evaluate the macroeconomic performance of Germany during the past decade. We focus on wage formation, competitiveness and export performance. We ask the question to what extent the German model is successful in relation to the long-run challenges posed by ageing and the need for higher employment, productivity and growth. We compare Germany with other European countries, including Belgium, the Netherlands and the Nordic countries. We conclude that the success of the German model is only partial. The ‘guide’ does not convince on certain aspects such as investment in human capital and the realization of full employment. Neither have the low skilled and the long-term unemployed been able to improve their relative position on the German labour market.

Macroeconomic performance under evolutionary dynamics of employee profit-sharing

2020 ◽  
Vol 8 (4) ◽  
pp. 589-615
Author(s):  
Gilberto Tadeu Lima ◽  
Jaylson Jair da Silveira
Keyword(s):  
Economic Growth ◽  
Evolutionary Dynamics ◽  
Capacity Utilization ◽  
Profit Sharing ◽  
Policy Implications ◽  
Macroeconomic Performance ◽  
Employee Compensation ◽  
Long Run ◽  
Short Run ◽  
The Impact

This paper investigates the impact on capacity utilization and economic growth as variables driven by effective demand of income distribution featuring the possibility of profit-sharing with workers. Firms choose to compensate workers with either a base wage or a share of profits on top of this base wage. In accordance with robust empirical evidence, workers in sharing firms have higher productivity than workers in non-sharing firms. The distribution of employee compensation strategies and labor productivity across firms is evolutionarily time-varying. Two major results carrying relevant theoretical and policy implications are obtained. First, heterogeneity in employee compensation strategies across firms (and therefore earnings inequality across workers) may emerge as a long-run equilibrium outcome. Second, beyond the short run, a higher fraction of profit-sharing firms may result in either higher or lower rates of capacity utilization and economic growth.

scholarly journals Inflation and Financial Sector Performance: The Case of Nigeria

2014 ◽  
Vol 7 (1) ◽  
pp. 55-69 ◽  
Author(s):  
R. Santos Alimi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Financial Sector ◽  
Macroeconomic Performance ◽  
Financial Sector Development ◽  
Long Run ◽  
Negative Effect ◽  
Short Run ◽  
Sector Performance ◽  
Definition Of

Abstract The paper examines the long run and short run relationships between inflation and the financial sector development in Nigeria over the period between 1970 and 2012. Three variables, namely; broad definition of money as ratio of GDP, quasi money as share of GDP and credit to private sector as share of GDP, were used to proxy financial sector development. Our findings suggest that inflation presented deleterious effects on financial development over the study period. The main implication of the results is that poor macroeconomic performance has deleterious effects to financial development - a variable that is important for affecting economic growth and income inequality. Moreover, we observed a negative effect of the measures of financial development on growth, suggesting that impact of inflation on the economic growth passes through financial sector. Therefore, low and stable prices, is a necessary first step to achieving a deeper and more active financial sector that will enhance growth as predicted by Schumpeter.

Detecting capital market convergence clubs

2017 ◽  
Vol 0 (0) ◽  
Author(s):  
Fuat C. Beylunioglu ◽  
Thanasis Stengos ◽  
M. Ege Yazgan
Keyword(s):  
Stock Market ◽  
Maximal Clique ◽  
New Method ◽  
Macroeconomic Performance ◽  
Arbitrage Opportunities ◽  
Long Run ◽  
Convergence Clubs ◽  
Market Convergence ◽  
Clique Algorithm ◽  
Absence Of Arbitrage

AbstractIn this study, we propose a new method to find convergence clubs that combine pairwise method of testing convergence with maximal clique algorithm. Unlike many of those already developed in the literature, this new method aims to find convergence clubs endogenously without depending on priori classifications. We use our method to study convergence among different capital markets as captured by their respective indices. Stock market convergence would indicate the absence of arbitrage opportunities in moving between the different markets as they would all present investors with similar risks. Furthermore, stock market convergence would be a precursor to GDP convergence as these economies would be bound by similar (possibly unobservable) common factors that affect long run macroeconomic performance.

Impact of Fiscal Decentralization on Private Savings in a Developing Country

2017 ◽  
Vol 12 (3) ◽  
pp. 259-285 ◽  
Author(s):  
Imran Hanif ◽  
Pilar Gago-de Santos
Keyword(s):  
Developing Countries ◽  
Developing Country ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Empirical Studies ◽  
Vector Error Correction ◽  
Long Run ◽  
Major Interest ◽  
Short Run ◽  
Private Savings

In this article, we provide empirical evidence on the long-run relationship between fiscal decentralization and private savings in a developing country. We take into consideration the particular impact of fiscal decentralization on private savings and investment as vehicles for fostering growth in Pakistan over a period of almost four decades (1972–2010). Additionally, we use the same dataset to capture the short-run dynamics between these variables. We find a significant and positive correlation between fiscal decentralization and private savings in Pakistan during the period in question. To test this relationship for the long run, we have resorted to co-integrated variables; by contrast, for analysis of the short run, we used a vector error correction model (ECM). Private savings are positively correlated with the fiscal decentralization process from a revenue perspective. Though previous empirical studies have shown mixed results—in the sense that inconclusive outcomes still prevail when linking growth and fiscal federalism—our findings could be of major interest to other developing countries currently undertaking fiscal decentralization. According to our analysis, fiscal decentralization may indeed play a key role in promoting economic growth in developing countries.

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