The Role of Revenue Volatility in Local Expenditure Volatility: A Comparison of Tokyo Metropolitan Local Governments

Abstract

Local expenditure volatility can have significant implications for the health of local economies. It is therefore essential to understand how fluctuations in the various components of municipal revenue translate into expenditure volatility. We examine the association between revenue and expenditure volatility for Tokyo Metropolitan Governmentswhich are comprised of both Special Wards and Tama Citiesthrough recourse to a six-year panel of fiscal data (2010-2015 inclusive). We find evidence of statistically significant positive associations between the volatility of most local taxes and expenditure volatility, but negative associations between the volatility of grants and expenditure volatility. This suggests that grants play an important role in smoothing out local expenditures in Tokyo and that the prescription for greater reliance on local taxation, found in much of the literature, may not be appropriate for Japanese local governments.

Volatilitas Penerimaan Dan Belanja Pemerintah Daerah Pasca Desentralisasi PBB-P2 Dan BPHTB

“…Berbeda dengan temuan di atas, penelitian lain menemukan hasil yang berbeda. Tran et al, (2018) justru menemukan hubungan yang bertolak belakang antara volatilitas belanja pemerintah kota Tokyo dengan dana transfer dari pemerintah pusat.…”

“…Mereka menunjukkan bahwa volatilitas dana transfer dan pajak penghasilan berhubungan positif dengan volatilitas belanja daerah, namun volatilitas pajak properti memiliki efek negatif pada volatilitas pengeluaran. Tran et al, (2018) juga berusaha untuk menginvestigasi hubungan antara volatilitas belanja pemerintah daerah dengan volatilitas pendapatan pemerintah kota Tokyo. Mereka menemukan bahwa ada hubungan positif yang signifikan antara volatilitas belanja daerah dan volatilitas penerimaan pajak daerah.…”

“…Penelitian ini menggunakan modifikasi dari model persamaan yang telah diaplikasikan dalam penelitianpenelitian sebelumnya (Mahi & Supriyanti, 2019;Sacchi & Salotti, 2017;Tran et al, 2018 menggambarkan selisih kenaikan/penurunan pajak dan penerimaan dana transfer dari pemerintah pusat yang diterima pemerintah provinsi i, dari tahun t sampai tahun t+x. Penelitian ini menggunakan periode 3 sampai 5 tahunan (dilambangkan dengan notasi x) untuk melihat pengaruh penerimaan pajak dan dana transfer terhadap volatilitas belanja pemerintah pada jangka pendek dan jangka menengah.…”

Deepening Fiscal Decentralization as a Path to Fiscal Responsibility? A Comparison of the Czech Republic and Turkey

“…However, the issue of so-called scal decentralization is most often discussed. Its basis is the effective performance of decentralized functions under conditions (Jílek, 2008;Tran, Drew, Noguchi, 2018): obtaining adequate income (local or provided by the highest level of the central government), freedom around expenditure.…”

“…The bene ts of using scal decentralization are often associated with potential gains from economic growth, improved social environment, or e cient provision of public services (Tran, Drew, and Noguchi, 2018). Sacchi and Salotti (2017) note how the collection of local taxes or revenue generation through government transfers affects local spending.…”