The central government grant allocation problem in the presence of misrepresentation and cheating

This study deals with the central government grant allocation problem under conditions of asymmetric information. Using a simple model, we examine herein the optimal design of random audit and incentive mechanisms to encourage the grantee (the local government authority) to report truthfully on local parameters required in the granting process. The local government authority must choose between two possibilities: a menu of contracts that could be considered as a matching grant programme with random auditing vs. a lump-sum grant without any audit mechanism. We will show that addressing the optimal grant system problem is similar to comparing slopes on the graph of the indirect local government welfare function at two distinct points.Received: January 2003, Accepted: November 2003, JEL Classification: H21, H23, H71, H77We would like to express our thanks to Howard Chernick and an anonymous referee for their extremely helpful comments.     

DESIGNING ECONOMIC INSTRUMENTS FOR THE ENVIRONMENT IN A DECENTRALIZED FISCAL SYSTEM

Abstract When external effects are important, markets will be inefficient, and economists have considered several broad classes of economic instruments to correct these inefficiencies. However, the standard economic analysis has tended to take the region, and the government, as a given; that is, this work has neglected important distinctions and interactions between the geographic scope of different pollutants, the enforcement authority of various levels of government, and the fiscal responsibilities of the various levels of government. It typically ignores the possibility that the externality may be created and addressed by local governments, and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems. This paper examines the implications of decentralization for the design of corrective policies; that is, how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services and to choose tax instruments that can both finance these expenditures and correct the market failures of externalities?     

A centralized directional distance model for efficient and horizontally equitable grants allocation to local governments

This paper proposes a directional distance model for efficient resource allocation when there is a centralized decision maker who oversees all units. The model is designed to allocate grants from an upper-tier government to the municipalities under its jurisdiction. Local governments employ the grants together with levied local taxes to provide services to their citizens. The objective of our formulation is to optimize grants allocation across municipalities taking into account efficiency, effectiveness and horizontal fiscal equity criteria. The model easily allows the setting of alternative priorities of the central decision maker, thus permitting quantification of the trade-off between the potential increase in the provision of local services and its associated cost. The model is applied to the allocation of current grants in the autonomous community of Navarre in northern Spain.     

Optimal fiscal policy for a state or local government

State and local government services are enjoyed by, and taxes borne by, two groups, residents and non-residents. This paper addresses the question: if state and local governments maximize their residents' welfare, and cannot distinguish between individual residents and non-residents but know the aggregate characteristics of the two groups, what set of taxes (subsidies) and public goods should they choose? Some of the results obtained are: (i) even when all commodities are taxable and equity is ignored, the existence of non-resident consumption makes uniform taxation non-optimal; (ii) in some cases, whether a commodity should be taxed or subsidized is independent of its own-price elasticity; (iii) central cities may be subsidized by suburban residents; and (iv) the ability of state and local governments to redistribute is inversely proportional to the openness of the economy.     

论地方政府行为效用导致的区域产业政策趋同

在区域经济的发展过程中,地方政府之间日益激烈的竞争必然会造成区域之间的产业政策趋同。这对于区域经济的协调发展和长远发展极为不利。应当通过提高中央政府的宏观调控水平,强化地方政府的责、权、利边界,引导地方政府在区域产业政策中体现差异性。     

THE IMPACT OF PUBLIC INFRASTRUCTURE ON MUNICIPAL ECONOMIC DEVELOPMENT: EMPIRICAL RESULTS FROM KENYA

This paper considers the role of public infrastructure in municipal economic development in Kenya. The primary objectives of the examination are to estimate the impact of roads and water infrastructure on municipal incomes, to ascertain the extent to which differences in institutional authority over water service delivery affect the quantity or quality of infrastructure, and to determine whether the presumed simultaneity between infrastructure and incomes matters for purposes of estimating the effect of the former on the latter. The analysis provides evidence to suggest that the impact of public infrastructure in the roads and water sectors on municipal economic development is significant. Also, the examination implies that local governments, when given authority over water services, do not appear to provide a larger quantity of water infrastructure than does the central government and/or its parastatal. On the other hand, and perhaps more significantly, the paper provides some initial evidence that the public water infrastructure services provided by local authorities are more accessible and reliable than those provided by central institutions. Finally, the results of the paper support the conclusion that possible simultaneity between public infrastructure and incomes does not seem to matter for estimating the quantitative impact of infrastructure on economic development.     

地方政府债券违约风险形成机制及防范——基于委托代理问题的分析

就地方政府债券而言,在地方政府和居民之间涉及两类委托代理问题:债权债务的代理问题和公共政策的代理问题。地方政府依凭中央政府的"父爱心理",具有向上转移债务的动机,导致地方政府债券规模人为扩大;地方政府"经济人"特性促使其有意识地运用公共债务追求自身利益而罔顾公共财政风险。这些都隐藏着潜在风险无限增加的可能性。可以从建立相应的法律法规制度、居民退出机制、地方政府内在约束机制、事前制约机制、事后监督机制以及深化政务公开制度来防范信用风险。     

基于CAP视角下的地方政府内部执行力提升机制研究

本文基于对CAP基本理论的分析,结合对地方政府内部执行力存在问题的研究,寻求提升我国地方政府执行力的有效机制,以推动政府更好地转变职能,促进中央与地方及整个社会的和谐发展。     

地方政府土地出让目标取向研究

目前我国地方政府在土地出让中,以土地收益极大化和招商引资作为双元目标取向,对地方财政、土地资源配置和社会稳定等造成不利影响.借鉴国际经验以及按照政府的双重身份和科学发展观的要求,地方政府土地出让的目标应为促进城市土地合理利用和适度土地收益,应采取相应政策措施消除地方政府土地出让目标扭曲的客观基础,促进土地出让目标和行为的合理化.     

PRINCIPLES AND THEORIES OF LOCAL GOVERNMENT

The role of local government is viewed in the context of the overall role of government per se. A particular advantage of local government lies in its ability to arrange for the provision of local public goods in line with local tastes and preferences. A number of arguments suggest that local governments should be assigned adequate powers of local taxation to finance their expenditure responsibilities rather than having to rely on central government grant.     

Local Government Management

In the United Kingdom (UK), the Labour Government is seeking to achieve fundamental change in the way local authorities are led and managed. To this end, it has introduced political and managerial reforms, central to which is the concept of ‘best value’. This new agenda, to which local authorities must respond, builds upon the changes which resulted from the Conservative era 1979–1997. Although Labour has abolished the centrepiece of Conservative policy towards local government, i.e. compulsory competitive tendering (CCT), Labour shares the belief of successive Conservative governments that local authorities must radically improve the way services are delivered. This article considers the nature of the changed local government environment in the UK, including the role, policy and service provision debates which have occurred in local government. It provides a conceptual framework within which to consider the degree of change which has occurred in local authority management. A typology of responses to change and a model by which past and future change may be gauged are suggested.     

The interaction between public and private governments: An empirical analysis

Private governments, found in planned developments and condominiums, are increasingly common methods of delivering local services to residents. This paper provides the first empirical study of their impact on local public finance. A novel data set of homeowners' associations allows construction of a panel of private governments in California. Panel methods test whether public expenditures respond to private government prevalence. Estimates indicate that local governments lower spending moderately in response to private government activity, consistent with strategic substitution. The paper then examines various mechanisms to explain this downloading and shows that the substitutability between public and private providers is key to which services are downloaded. Evidence also suggests that the economies of scale in service production in small cities temper the offloading of public services to private governments.     

浅谈银行如何有效防范地方政府融资风险

在94年国家进行分税制改革之后,财政收入向中央政府集中,这加剧了各地方政府事权与财权不平衡的局面,政府融资平台为地方政府拓宽了融资渠道。进入2008以来,受国际金融危机的影响,我国实施了宽松的货币政策和积极的财政政策,推动了各地方政府融资平台飞速发展,在应对金融危机方面起到了重要作用。但是地方政府融资债务疯狂增长下其隐藏的风险已经逐渐凸显出来,值得我们关注。本文从银行的角度浅析了银行如何防范来自地方政府融资的风险。     

Does local government competition aggravate haze pollution? A new perspective of factor market distortion

Haze pollution has become a new threat to China's sustainable development, but it may be that local government behaviour can play an important role in the prevention and control of pollutants. A dynamic spatial autoregressive (SAR) model is used to study the relationship between local government competition and haze pollution. To further explore the indirect impact of factor market distortion on haze pollution and control potential endogeneity problems, a newly developed intermediary effect model that incorporates the characteristics of the generalized method of moments (GMM) is utilized to explore how factor market distortion indirectly affects haze pollution. The research results show that regional haze pollution in China is characterized by significant spatial correlation, and local government competition has a positive impact on haze pollution; that is, local government competition exacerbates haze pollution. In general, local government competition not only directly leads to an increase in haze pollution but also further intensifies it by distorting the local factor market, and the intermediary role of factor market distortion is approximately 7.04%. The results of the regional inspection found that competition among local governments in the eastern region did not lead to haze pollution, and distortion of the factor market did not exist as an intermediary effect. However, both direct and intermediary effects are significant in the central and western regions. Therefore, an official performance appraisal system that includes ecological constraints should be established to guide the benign transformation of local government competition, and an environmental management mechanism must be developed for joint prevention and control to reduce haze pollution. In addition, the free flow of factors and marketization are equally important.     

Local Political Corruption: Potential structural malfunctions at the central–local,local–local and intra-local levels

Abstract

Despite growing preoccupation on the part of both the public and researchers with the concept of political corruption and the ‘corruption eruption’ phenomenon, research studies addressing corruption in local government are few and far between. This exploratory research offers a theoretical conceptualization of institutionalized corruption in local government, and identifies structural factors that lead to such corruption. Further, this study empirically assesses institutional corruption at the local level and its correlation to attitudes and characteristics of local authorities and their populations, based on a survey of 1,709 residents of 156 local authorities in Israel and data on the local authorities from a separate database. This article proposes a model according to which local corruption arises from structural factors at three levels: the central–local level (relations between local authorities and the central government); the local–local level (competition between local authorities) and the intra-local level (factors relating to the performance of local councils and local democracy). Our analyses reveal correlations among characteristics of the local authority and community, residents' perceptions of local performance and perceptions of local corruption. Implications of the findings in light of strategies conventionally employed against corruption in local government are discussed.     

Public value,institutional logics and practice variation during austerity localism at Newcastle City Council

This article outlines how a local authority, Newcastle City Council (NCC), employed a public value strategy to address austerity localism. Borrowing from neo-institutional theory, it traces how organizational change constituted also a variation of democratic deliberation practices. Legitimation of budget decisions against central government cuts involved such practice variations as public consultations to change NCC’s vision and mobilize support, building operational capacity beyond the organization, and new accountings for measuring public value. Insofar as such organization changes constituted instances of institutional entrepreneurship of local government as a key democratic institution, our article refines existing theorizing of public value accounting.     

Federalism,taxation, and economic growth

We present a model of endogenous growth where government provides a productive public good financed by income and capital taxes. In equilibrium, a decentralized government chooses tax policy to maximize economic growth, while a centralized government does not do so. Furthermore, these conclusions hold regardless of whether governments are beholden to a median voter or are rent-maximizing Leviathans. However, a decentralized government will under-provide public goods which benefit citizens directly, while a central government beholden to the median voter will optimally invest in such public goods.     

“十二五”时期农民工市民化成本测算及其分担机制构建——以跨省农民工集中流入地区宁波市为案例

本文以宁波市为案例,对"十二五"时期农民工及其家属市民化的成本进行了测算。测算表明,地方政府为农民工提供与本市户籍居民同水平的子女义务教育、公共卫生、就业培训、社会保障和改善住房条件等公共服务,人均需投入13507.4～25507.4元。在此基础上,本文设计了农民工市民化的成本政府间以及政府与企业间的分担机制,中央政府重点加强跨省农民工集中流入地区的支持,企业主要在农民工权益保障、职业培训、社会保险和住房条件改善方面发挥积极作用。     

浅谈新时期县级政府社会管理能力提升

作为连接中央与地方的纽带,提升县级政府的社会管理能力具有重要的研究意义。其有利于提升政府社会管理能力,维护社会稳定,化解社会矛盾,促进经济社会和谐发展。     

Tax Competition and Revelation of Preferences for Public Expenditure

This paper considers a federal country composed of local jurisdictions that differ in their inhabitants' tastes for public goods, and which finance local public expenditure through a source-based tax on capital income. The taste for public goods is the private information of local governments. The central government seeks an optimal policy, in which grants to local governments are conditioned on local tax rates. The uninformed central government seeks both to allocate capital efficiently among jurisdictions, and to induce jurisdictions to provide an efficient mix of private and public consumption. It is shown that there persist at this constrained optimum both some misallocation of capital and some violation of the Samuelson rule for optimal public good provision in every jurisdiction.