تمرکز زدایی مالی و کسری بودجه : شواهد و مدارک بین المللی

This paper investigates macroeconomic effects of fiscal decentralization, which has been a neglected area of research. Panel evidence for 16 countries over 1980–1998 indicates that expenditure and revenue decentralization reduce budget deficits. A principal finding is that the fiscal disciplining effect of fiscal decentralization increases with population size. Interestingly, absence of local elections is associated with greater effectiveness of fiscal decentralization. The benefits of expenditure decentralization decrease with ethnolinguistic fractionalization and quality of governance.

Fiscal decentralization (FD) occurs through devolution of responsibilities for public spending and revenue collection from the central to local governments. FD has been a feature of economic reform programs based on the following arguments: (i) decentralization of spending increases efficiency because local governments have better local information and hence can better match policies with the preferences of citizens (Samuelson, 1954, Oates, 1972 and Oates, 1993); (ii) decentralization of fiscal activity increases accountability and transparency of public good delivery (de Mello, 2000a); and (iii) taxpayers are more willing to cooperate with the accountable local governments (Wasylenko, 1987).1 Following on from these arguments, we would predict that FD decreases government deficits. With the exception of De Mello, 2000b), this prediction has not received much attention.2De Mello (2000b) examined fiscal structures in a number of countries and reported negative effects on fiscal balances due to coordination failures in intergovernmental fiscal relations, especially in low-income countries.3 The study reported here goes beyond de Mello (2000b) in addressing the role of the institutional and structural factors that influence the relationship between FD and budget deficits and in treating separately expenditure and revenue decentralization. An investigation of the effects of FD on budget deficits should address both expenditure and revenue aspects of FD. The literature emphasizes that decentralization of fiscal expenditures may increase the efficiency of local public good delivery when a country is large, heterogeneous, or ethno-linguistically fractionalized because it is especially in these cases that local governments are in a better position than the central government to assess local preferences.4

The research on the relationship between socio-economic variables and fiscal decentralization (FD) has been rather inconclusive about the benefits of FD. The current paper is the first to investigate the effect of FD on government budget deficits in a panel sample, explicitly accounting for the structural and institutional factors that the literature suggests affect this relationship. The evidence that has been presented reveals a significant negative effect of fiscal decentralization on deficits. The findings however also caution about an unconditional policy recommendation of fiscal decentralization, as the evidence also reveals that country characteristics and institutional features significantly influence the effectiveness of fiscal decentralization in reducing deficits. The current study indicates that the effectiveness of fiscal decentralization in reducing deficits is enhanced by the size of population, even though deficits, on average, are positively associated with population size. The results also draw attention to the following observations. While expenditure decentralization is more effective in case of low degrees of ethnolinguistic fractionalization and governance, these features do not seem to influence the effectiveness of revenue decentralization. FD also seems to be more effective in the absence of local elections, which may be associated with moral hazard in less developed countries. Because different specifications of the FD variables reveal different effects of ethnolinguistic fractionalization, governance, and local elections on the effectiveness of FD, deriving policy conclusions may require further analysis in larger samples.