Federalism, but how? The impact of vertical fiscal imbalance on economic growth. Evidence from Belgium*

2021 ◽  
Author(s):  
Alessio Mitra ◽  
Athanasios Chymis
Keyword(s):  
Economic Growth ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance ◽  
The Impact

scholarly journals Vertical Fiscal Imbalance and Regional Economic Growth

2020 ◽  
Vol 12 (6) ◽  
pp. 39-53
Author(s):  
B.I. Alekhin ◽  
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Fiscal Federalism ◽  
Fiscal Decentralization ◽  
Regional Economic Growth ◽  
Regional Economic ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance ◽  
The Impact

This study examines the impact of fiscal decentralization on regional economic growth using panel data for 82 subjects of the Russian Federation for the period 2005-2018. General theoretical framework was drawn from the second-generation theory of fiscal federalism, and panel data econometrics suggested the appropriate empirical model and estimation method. The pooled mean group method was used to estimate an autoregressive distributed lags model based on Solow-Swan theory of economic growth. The results indicate that vertical fiscal gap has a negative and significant long-term impact on regional economic growth while vertical fiscal imbalance has a positive and significant long-term effect. The study is consistent with the modern theory of fiscal federalism, W.E. Oates’ matching hypothesis and previous empirical work using Russian data. The study also found evidence of conditional convergence of regional economies.

scholarly journals REGIONAL DISPARITIES, PUBLIC POLICIES AND ECONOMIC GROWTH IN BRAZIL

2019 ◽  
Vol 5 (2) ◽  
pp. 264
Author(s):  
Marcelo Ladvocat ◽  
Vander Lucas
Keyword(s):  
Economic Growth ◽  
Fiscal Federalism ◽  
Local Economic Development ◽  
Fiscal Decentralization ◽  
Federal District ◽  
Regional Disparities ◽  
Geographic Concentration ◽  
Goods And Services ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance

Fiscal Federalism, the division of economic responsibilities between the central and local government, has been an ongoing debate. The few existing studies on Brazilian’s fiscal structure facing regional economic growth shows conflicting results. However fiscal decentralization can lead to a more efficient provision of local public goods and services to promote welfare state, citizen’s preferences and economic growth, Brazil's policymakers seem to have a different view. In a country where only three states in 26 hold 53% of Brazil’s PNB, disparities shows-up claiming to be solved. There are still some questions as to whether all regions can achieve real gains with greater autonomy. Decentralization may not solve all subnational entities problems, especially the issue of the poorer regions losing competitiveness about the richer regions, which increases regional disparities. In this way, more recent studies have focused on the different channels through which fiscal decentralization can affect the issue of disparities such as taxes and duties, the autonomy of spending and vertical fiscal imbalance. The present work investigates the relationship between fiscal decentralization, regional disparities and economic growth within 26 Brazilian’s states and Federal District, in the period 2001-2012. Attention was given to channels through which decentralization can affect inequality: human capital, vertical fiscal imbalance, population’s geographic concentration, and local taxes. The empirical analysis suggests that a decentralized fiscal structure can reduce regional disparities by implementing better government policies that favor local economic development.

scholarly journals Fiscal Decentralization and Economic Growth in Thailand: A Cross-Region Analysis

2019 ◽  
Vol 11 (1) ◽  
pp. 147
Author(s):  
Phouthakannha Nantharath ◽  
Sirisak Laochankham ◽  
Peerasit Kamnuasilpa ◽  
Eungoo Kang
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Local Governments ◽  
Fiscal Decentralization ◽  
Local Level ◽  
Regional Economic Growth ◽  
Regional Economic ◽  
Positive Effects ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance

Prior to the 1997 decentralization, over 90% of national revenue in Thailand were held at the central government and less than 10% of public expenditure were allocated to local governments across country. Lack of adequate revenue and access to sufficient expenditure budget has caused disparity and ineffectiveness of public services and economic development at the local level. This study examines the effects of the fiscal decentralization on the economic growth in Thailand from 2004 to 2017. The research methodology uses a cross panel data analysis across five provincial regions and considers revenue decentralization, expenditure decentralization, transfer dependency, and vertical fiscal imbalance as influential factors of growth. By applying Panel Fully Modified Least Squares (FMOLS) and Panel Dynamic Least Squares (DOLS) regression approaches, the study finds empirical evidence of positive effects of revenue decentralization, transfer dependency, and vertical fiscal imbalance on regional economic growth across five regions. However, this study also finds that expenditure decentralization has a negative impact on regional economic growth, but level of significance is weak. These findings suggest that the rapid increase in metropolis government expenditure budget following the years of political transition in 2006 and 2014 has caused stagnation in public investment at local level across country, thereby resulted in a lagged behind industrial output and gross provincial product. Lack of budget expenditures also weakens demand and stagnates growth in manufacturing, construction, and real estate activities, thereby rendering fiscal imbalances and development gaps in Thai economy.

scholarly journals FLYPAPER EFFECT THEORY DALAM IMPLEMENTASI KEBIJAKAN DESENTRALISASI FISKAL

2015 ◽  
Vol 11 (1) ◽  
pp. 69
Author(s):  
Suyanto Suyanto
Keyword(s):  
Central Government ◽  
Fiscal Decentralization ◽  
Flypaper Effect ◽  
Effect Theory ◽  
Decentralization Policy ◽  
Fiscal Imbalance ◽  
Vertical Fiscal Imbalance ◽  
The Impact ◽  
Financial Transfer ◽  
Regional Governments

Fiscal decentralization can be considered as intergovernmental financial assistance within a state. This assistance is commonly called intergovernmental financial transfer that is transfer of fund from a level of government to another level. Generally, the transfer is usually occurred from a higher level of government the lower counterpart of a single state. The re- search is conducted to prove that Flypaper Effect has occurred in fiscal decentralization policy. The research finds that regional governments use the transfer for increasing their expenditures without raising the tax. The impact which is occurred from correlation of financial transfer by central government toward the income and expenditure of regional governments shows flypaper effect indication in the implementation of fiscal decentralization. In that case, the effect to the increase in regional expenditure is bigger than the effect toward its income. This is showing that transfer of the fund has caused the increase in vertical fiscal imbalance. Transfer of funds encourages the increase in the expenditure of autonomous regions.

Implications of higher retirement age for the labor market

2017 ◽  
pp. 22-39 ◽  
Author(s):  
M. Ivanova ◽  
A. Balaev ◽  
E. Gurvich
Keyword(s):  
Economic Growth ◽  
Labor Market ◽  
Labor Supply ◽  
Labor Force ◽  
Labor Demand ◽  
Retirement Age ◽  
Demographic Trends ◽  
Men And Women ◽  
Demographic Projections ◽  
The Impact

The paper considers the impact of the increase in retirement age on labor supply and economic growth. Combining own estimates of labor participation and demographic projections by the Rosstat, the authors predict marked fall in the labor force (by 5.6 million persons over 2016-2030). Labor demand is also going down but to a lesser degree. If vigorous measures are not implemented, the labor force shortage will reach 6% of the labor force by the period end, thus restraining economic growth. Even rapid and ambitious increase in the retirement age (by 1 year each year to 65 years for both men and women) can only partially mitigate the adverse consequences of demographic trends.

Solow economy model

2019 ◽  
pp. 150-157
Author(s):  
Oleksandr Synenko ◽  
Kateryna Yarema ◽  
Yuliia Bezsmertna
Keyword(s):  
Economic Growth ◽  
Regression Analysis ◽  
Solow Model ◽  
Economy Model ◽  
Accelerated Depreciation ◽  
Basic Parameters ◽  
The Subject ◽  
Investment Process ◽  
The Impact ◽  
Model Algorithm

The subject of the research is the approach to the possibility of using the Solow model to perform the regression analysis on the example of the Ukrainian economy model. The purpose of writing this article is to investigate the notion of regres- sion analysis, Solow’s economy model, algorithm for performing regression analy- sis on the example of Ukraine’s economy model. This model can be adapted for the economy of enterprises. Methodology. The research methodology is system-struc- tural and comparative analyzes (to study the structure of GDP); monograph (when studying methods of regression analysis on the example of the Ukrainian economy); economic analysis (when assessing the impact of factors on Ukraine’s GDP). The scientific novelty consists the features of the use of the Solow model on the ex- ample of Ukrainian economy are determined. An algorithm for calculating the basic parameters of a model using the Excel application package is disclosed. The main recommendations on the development of the national economy and economic growth through the use of macroeconomic instruments are given. Conclusions. The use of the Solow model enables forecasting and analysis. The results obtained re- vealed the problem of low resource return of capital as a resource, along with the means of macroeconomic regulation of the investment process, using which can improve the situation. A special place in these funds belongs to the accelerated depreciation and interest rate policies.

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