Are fiscal decentralization and institutional quality poverty abating? Empirical evidence from developing countries

Digdowiseiso, Kumba

doi:10.1080/23322039.2022.2095769

Cited by 12 publications

(14 citation statements)

References 27 publications

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“…As a result, they will divert the financial sources to the most needed faction of society with greater accuracy and efficiency, which will significantly contribute to uplifting the status of poor people. Our findings are consistent with Digdowiseiso [52], Hussain et al [35] and Siburian [23], which conclude that fiscal decentralization helps in eradicating poverty.…”

Section: Results Discussionsupporting

confidence: 91%

Examining the Impact of Fiscal Resources on Anti-Poverty Expenditure: Evidence from China

Qin

Sohail

2023

Sustainability

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In developing countries, anti-poverty programs are often implemented by local governments. However, due to the limitation of fiscal resources, the amount of anti-poor expenditure by the local government is generally less than what is needed for the poor. In this paper, we investigate whether an increase in the fiscal resources of local government will lead to an increase in anti-poor fiscal expenditure using county-level Chinese data. Using the fixed effect model, we show that local governments will put more fiscal resources into the minimum living standard guarantee (MLSG) system if they receive more intergovernmental transfers from high-level governments, but this effect only exists in urban areas. Moreover, the off-budget fiscal revenue does not affect the anti-poverty expenditure, both in rural and urban areas.

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Section: Results Discussionsupporting

confidence: 91%

Examining the Impact of Fiscal Resources on Anti-Poverty Expenditure: Evidence from China

Qin

Sohail

2023

Sustainability

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“…Rapid growth in land finance income has allowed a small number of speculators who purchase real estate as an investment to acquire large amounts of wealth, while the majority of people are unable to own homes (Cai et al, 2019). Fiscal decentralization, which allows local governments to plan their own actions so long as they achieve nationally specified goals, was implemented by China's central government in 1994 to achieve faster economic growth (Ding et al, 2018;Digdowiseiso, 2022). The impact of fiscal decentralization on income inequality is uncertain.…”

Section: Independent Variablementioning

confidence: 99%

“…The impact of fiscal decentralization on income inequality is uncertain. A local government can narrow the gap with other provinces by regulating tax revenues (Digdowiseiso, 2022), but may also increase the urban-rural gap due to resource allocation imbalances (Zhou and Yang, 2023). Transfer payments from the central government to local governments and social security payments to retired workers are both policies related to reducing income disparities (Lei et al, 2016;Yu and Li, 2021).…”

Section: Independent Variablementioning

confidence: 99%

What are the stumbling blocks to shared prosperity in China

Guo,

Yang,

CAO

2024

Preprint

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statement: Sharing prosperity is a goal of human society, but unreasonable income distributions develop that lead to social unrest and regime change. However, around the world, a small number of people have begun to own most of society’s wealth. China, the world's largest socialist country, is supposed to fight for the rights of the proletariat, but has also been suffering from an increasingly serious wealth inequality. We studied the available income data for Chinese provinces (from 2003 to 2019) and in contrast with previous research, found that the wealth gap depended on how the inequality index was calculated and on differences in regional characteristics. Our results provide insights that will benefit other countries plagued by wealth inequality.

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“…Through the state expenditure report of the National Association of State Budget Officers (NASBO), Swanson et al (2020) [9] believe that the state government bears more responsibility in funding than the federal government, and that the decentralization of medical assistance will improve poverty. Kumba Digdowiseiso (2022) [10] focused on how the function of institutional quality can explain the relationship between fiscal decentralization and poverty in 53 developing countries from 1990 to 2014, and the findings showed that both revenue and expenditure decentralization were negatively and significantly associated with poverty. Qi et al (2022) [11] proved that fiscal decentralization is significantly conducive to the industrial green transformation, and the impact of fiscal expenditure decentralization in promoting industrial green transformation is significantly greater than that of fiscal revenue decentralization.…”

Section: Introductionmentioning

confidence: 99%

Impact of Chinese-Style Fiscal Decentralization on Urban–Rural Integration: Based on Factor Allocation

Zhou

Fan

2023

Sustainability

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The urban–rural relationship has been a critical issue in studies on urban and rural geography. Urban–rural integration development (URI), as an integral part of the urban–rural relationship, needs to be understood under an integrated theoretical framework. Based on the conceptual analysis from productivism to post-productivism, this study constructs a multidimensional framework to understand urban–rural integration, restructuring from five layers that integrate population, space, economic, social, and environmental concerns, and the revised dynamic coordination coupling degree (CCD) model is used to measure the level of URI. Many studies have focused on the connection between URI and factor allocation. However, it is yet to be determined how both fiscal decentralization and factor allocation are linked with URI. This study focuses on this unexplored topic, and the impact mechanism among URI, factor allocation, and Chinese-style fiscal decentralization is investigated by adopting spatial econometric models, for achieving the high-quality development of China’s urban–rural relations. Empirical analysis of China’s three major urban agglomerations reveals that there are promising signs in China’s urban–rural integration development, with an orderly and coordinated structure shaping over the period 2003–2017. The rationality of factor allocation depends heavily on the power comparison between the helping hand and the grabbing hand of local governments under Chinese-style fiscal decentralization. Moderate fiscal decentralization, with a perfect market and social security system, leads to the free flow of factors and promotes urban–rural integration. By contrast, excessive fiscal decentralization causes resource misallocation and hinders urban–rural integration development. In light of our empirical evidence, the coordinated development of small- and medium-sized cities and subcities in urban agglomerations is suggested, it is highly necessary to establish a perfect social and employment security system. In addition, a reasonable space planning system for land use needs to be constructed by China’s governments at all levels. Chinese local governments should pay more attention to rural development in their jurisdiction by stimulating their information advantages under Chinese-style fiscal decentralization.

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Are fiscal decentralization and institutional quality poverty abating? Empirical evidence from developing countries

Cited by 12 publications

References 27 publications

Examining the Impact of Fiscal Resources on Anti-Poverty Expenditure: Evidence from China

Examining the Impact of Fiscal Resources on Anti-Poverty Expenditure: Evidence from China

What are the stumbling blocks to shared prosperity in China

Impact of Chinese-Style Fiscal Decentralization on Urban–Rural Integration: Based on Factor Allocation

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