commission on fiscal imbalance 合集

In 1998 the average subnational share of expenditures

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Unformatted text preview: set. The Government Finance Statistics (GFS), which has consistent definitions across some countries over time, is the only existing source of data for worldwide cross-country analysis of fiscal decentralization and public finance. Although, GFS is the most widely available internationally comparable data source on subnational finances, it is not an ideal data set for measuring fiscal decentralization. The need to standardize fiscal variables in GFS inevitably leads to a loss of details. For example, although GFS provides a breakdown of expenditures by function and economic type, it is silent about expenditure autonomy. Thus, expenditures that are mandated by the central government appear as subnational expenditure in the GFS. Similarly, on revenue side, the GFS contains information about tax and non-tax revenues, intergovernmental transfers, and other grants, but it does not distinguish whether taxes are collected through shared taxes, piggybacked taxes, and locally determined "own-source" taxes, or what proportion of intergovernmental transfers is conditional as opposed to general purpose transfers. Although the expenditure share of subnational governments in total government spending is an imperfect measure of fiscal decentralization, in the absence of an appropriate indicator, economists commonly use the percentage share of subnational governments expenditure in total government expenditure as a representative of fiscal decentralization. Figure 2 shows the degree of fiscal decentralization, measured as the percentage share of subnational governments expenditure in total government spending, for those countries reported subnational statistics in 1998. In general, subnational governments (intermediate plus local) in federal countries have executed higher portion of total government spending than their counterparts in unitary countries. In 1998, the average subnational share of expenditures is 38% for federal countries and 22% for unitary countries. 1.2. Generalizations About Decentralization The government structure in any country is unique reflecting the historical, social, and cultural evolution of the society. The differences in the structure of government are a natural consequence of these factors. Despite such differences, the structure of intergovernmental financial system in many countries exhibits certain broad patterns, such as the existence of inadequate "own resources"5 of subnational governments to finance the expenditure functions, the heterogeneity of subnational governments, and the lack of subnational autonomy to levy taxes that are capable of yielding enough revenue to meet local needs (Bird, 1995). First, subnational governments don't have adequate level of "own resources." The revenues under direct control of local governments invariably less than their expenditures in most countries. Due to lack of data for own source of revenues, Table 1 presents local governments' revenues as a percentage of their expend...
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