A Comparative Approach to Fiscal Illusions: a Synthesis of the Conclusions from a Polish Study in Relation to New Ideas and Empirical Research in Selected Countries

This article examines fiscal illusions in public finance systems where decentralisation involving the introduction of an independent and autonomous component of local government funding brings new problems. It presents a synthesis of the findings from a Polish empirical study that set out to determine the types and extent of fiscal illusion among Polish councillors, focusing on the qualitative aspects of the phenomenon. It also compares the findings with other streams of research and new approaches to fiscal illusion. The purpose of the article is to systematise the knowledge of fiscal illusion based on selected empirical studies, to formulate proposals for practitioners and public decision‑makers, and to highlight areas for future research to address. The article was prepared using a desk research approach and the author’s own experiences and research perspective formed during the study of fiscal illusions. The findings presented in the article corroborate its main thesis that a local government funding system based on intergovernmental transfers contributes to the emergence and perpetuation of fiscal illusions.

Determinants of Financial E-Transparency in Honduran Municipalities

This paper contributes to the scarce literature on e-government transparency in Central America by analyzing the impact of political, financial and socio-economic factors on municipal financial e-transparency in Honduras. The sample covers 86 Honduran municipalities in 2016-17. The data show a weak impact of ideology and mayor's gender on e-transparency, with progressive governments and men achieving more e-transparency. Municipalities receiving more transfers are more transparent. Taking all financial variables together, the data are in line with the Theory of Fiscal Illusion and the Theory of Agency, since municipalities are not reporting greater levels of taxes, deficit, and debt to their taxpayers. Honduran municipalities are only concerned about meeting central government legal requirements about transfers received. The fact that municipalities do not increase e-transparency to be held accountable by their citizens is against the assumptions of the Theory of Legitimacy. Finally, larger municipalities and with greater income are more fiscally transparent.