Fiscal decentralisation, efficiency, and growth

Much of the recent worldwide trend towards devolution has been driven by the belief that fiscal decentralization is likely to have a positive effect on government efficiency and economic growth. It is generally assumed that the transfer of powers and resources to lower tiers of government allows for a better matching of public policies to local needs and thus for a better allocation of resources. These factors, in turn, are expected to lead to an improvement in regional economic performance, if subnational authorities shift resources from current to capital expenditures in search of a better response to local needs. This paper tests these assumptions empirically by analysing the evolution of subnational expenditure categories and regional growth in Germany, India, Mexico, Spain, and the USA. We find that, contrary to expectations, decentralisation has coincided in the sample countries with a relative increase in current expenditures at the expense of capital expenditures, which has been associated with lower levels of economic growth in countries where devolution has been driven from above (India and Mexico), but not in those where it has been driven from below (Spain). The paper hypothesises that the differences in legitimacy between the central or federal government and subnational governments in top-down and bottom-up processes of devolution may be at the origin of the diverse capacity to deliver greater allocative and productive efficiency and, eventually, greater economic growth by devolved governments.devolution; fiscal decentralisation; subnational expenditure; economic growth; Germany; India; Mexico; Spain; United States

Foreign Policy as Part of Strengthening the Polish Economy in the World: the Ethical Aspect

The technological, economic and political advances of the 20th and 21st centuries have established new conditions for the development of civilization. The world economy has simultaneously expanded (the number of states/organization participating in world trade or the volume of heterogeneous transactions) and shrunk (close interrelations between transactions, no matter their geographic origins). Economic policy has gained an indispensable role in the creation of order in international relations and foreign policy. The tendency to prioritize foreign policy aims towards economic policy aims has resulted in ‘reverse flow’, i.e. foreign policy has become a central part of national economic policy. The engagement of external action services and public budget in economic promotion and investments triggers (inter alia) the ethics dilemma. The mentioned ethical aspect is often omitted when discussing ‘the economic foreign policy’. For instance, the ethics dilemma can appear when development and humanitarian aid are taken into account or when it comes to assessing the results (and membership) of economic missions. In this context, the author analyses the Polish foreign policy example and attempts to answer two questions. First, are the economic activities performed by external action services effective? Second, are the mentioned activities in accordance with the social ethical code of conduct? The author focuses on three elements – development and humanitarian aid, the participation of Polish diplomats in economic promotion, and economic missions

Reforming Immigration: Helping Meet America's Need for a Skilled Workforce

In this report, CED calls for reform in four categories: broadening the skill base of immigrants, restructuring the administration of immigration, rationalizing the admission of permanent and temporary workers, and creating mechanisms for flexible policies

Big Business and Economic Nationalism in India.

Abstract: This paper emphasizes that economic nationalism in India both contributed to and coexists with the liberalization process initiated since 1991, which marked a decisive break in India’s economic policy and pushed her towards increased integration with the global economy. It is however an inherently more exclusive form of economic nationalism in which capitalist priorities press down harder on an already constrained state. India’s capitalists embraced rather than resisted the liberalization process, in contrast to their active support for a strategy of autonomous development at independence. The paper focuses on this shift in the outlook of the capitalist class represented by India’s big business and tries to identify the reasons why it initially emerged and why it has gathered strength over time. The paper argues that this transformation reflected the development and evolution of Indian capitalism resulting from industrialization under the older autonomous strategy. Embracing liberalization became both possible and necessary for India’s capitalists. The shift in the Indian state’s policy thus was a response to the imperatives of national capitalist development, and the state has continued to assist Indian capital’s growth and development in different ways. Indian capital has in fact gained increased leverage with the state and with its support has grown rapidly and stepped on to the global stage. In the process it has also changed – become less industrial, and more integrated into global production and financial systems. This growth and transformation of Indian big business in turn has reinforced its support for liberalization.Big Business; Economic Nationalism; India

INSTITUTIONAL CHANGE IN INDIAN AGRICULTURE

Globalization, privatization and scientific advancements pose new challenges and opportunities for the development of Indian agriculture. The emerging paradigm shifts focus to creation and application of new knowledge for agricultural development and global competitiveness. To facilitate this shift and realize greater economic efficiency, a new set of responsive institutions should emerge. This volume discusses the direction of institutional change in Indian agriculture. The roles of the state, markets and collective actions are examined for evolving the knowledge-intensive agriculture. The contributed papers from a number of leading researchers cover the institutions for R&D, land and water resources, credit, marketing, trade and agro-processing.Industrial Organization, International Development,

India - India's growing conflict between trade and transport : issues and options

India was a rather marginal participant in world trade during the early years after independence. Since 1980, however, the structure and orientation of Indian export trades have undergone fundamental changes. Substantial progress has been made in diversifying the export base - manufactured goods have increased and the traditional bulk sector has shrunk. Key targets for the export of manufactured goods are the European, Japanese and North American markets. However, these markets are characterized by increasingly efficient trade logistics, including containerization and multimodal transport arrangements. To enable further trade growth, India is confronted with a need to tie into the highly organized international trade logistics networks, something the country is totally unprepared to cope with in terms of demanding logistical arrangements. There is a real danger that India's trade performance will deteriorate, if no corrective measures are taken. A highly fragmented service industry, outdated regulations, heavy Government control, a constrained private sector, and largely inadequate infrastructure have curtailed efforts to improve trade logistics, including containerization and multimodal transport arrangements in India. Major reforms are called for so that an effective framework for initiating urgently required system adjustments can be established.Environmental Economics&Policies,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Transport and Trade Logistics,Common Carriers Industry

Napoleon Code versus local customs? Institutional environment, networks, and the enforcement fo rural labor contracts in Mayotte

Le rôle de l'environnement institutionnel dans l'exécution des pratiques contractuelles est largement reconnu. Cependant, peu d'attention a été portée à la nature " composite " de cet environnement, au-delà de la dichotomie formelle/informelle, et à son " fonctionnement " effectif. C'est précisément pour illustrer cette thématique que Mayotte, une île française de l'Océan Indien, fournit un exemple pertinent. Mayotte, qui décida de rester française en 1976 lors du référendum d'indépendance et de séparer des îles voisines des Comores, a affirmé récemment sa volonté d'intégrer pleinement la République. Ce choix a impliqué le renforcement du cadre légal français, celui-ci venant s'ajouter plus que se substituer aux institutions d'origine africaine et musulmanes, régulant encore de façon très marquée la société mahoraise. La confrontation de ces cadres légaux -un code civil importé versus des règles coutumières et musulmanes très prégnantes- induit une situation originale de pluralisme institutionnel. La mise aux normes des conditions socio-économiques, réalisée de façon accélérée en vu de la départementalisation, a parallèlement accentué les différences de richesses entre Mayotte et îles voisines des Comores. De tel écarts ont engendrés un mouvement massif de migration : à présent à Mayotte un tiers de la population est situation irrégulière, et un large partie d'entre eux s'emploie illégalement dans le secteur agricole. En marge du cadre légal français, ces contrats de travail sont soumis à des risques d'opportunisme élevés. Cette contribution met en lumière le rôle de cet environnement institutionnel composite dans la garantie des engagements contractuels, en soulignant le jeu effectif des institutions, et notamment le jeu " informel " des institutions " formelles ". L'analyse repose sur un travail de terrain approfondi (18 mois) et une méthode construite à la fois sur des bases économiques (fournissant les intuitions théoriques) et anthropologiques (étude de cas et observation participante). (Résumé d'auteur

Information Outlook, May 2007

Volume 11, Issue 5https://scholarworks.sjsu.edu/sla_io_2007/1004/thumbnail.jp

Strategic Analyses of the National River Linking Project (NRLP) of India, Series 1. India’s water future: scenarios and issues

River basinsEnvironmental flowsDevelopment projectsWater requirementsIrrigated farmingWater demandFood demandGroundwater irrigationIrrigation efficiencyWater harvestingSupplemental irrigationWater productivityWater conservationDrip irrigationSprinkler irrigationRainfed farmingAgricultural policy

Interest groups or incentives: the political economy of fiscal decay

One view is that concessions demanded by and granted to interests groups are responsible for steady fiscal decline, and delay in reforms. We argue that negative supply shocks combined with the political objective of protecting the poor can build in incentives leading to these results. Pricing rules for government services, generated in such circumstances, would be equivalent to a fixed price contract that left the government with negative rent. A decline in investment in and quality of government services would follow, since price controls in the presence of cost shocks would lead to systematic incentives to lower quality and investment. Tax capacity and the ability to reduce poverty in the future would fall. The framework helps to understand the Indian experience. Time series based tests of causality support the causal priority of positive cost shocks. If it is accepted that incentives, and not only interest groups are responsible for fiscal decay, a concerted attempt to rationalize user charges and improve quality may be politically feasible