Fiscal Decentralization, the Composition of Public Spending, and Regional Growth in India

In this paper, we present an analytical model for examining the growth impact of intergovernmental and intersectoral allocation of public expenditure. The model helps us quantify the role of fiscal decentralization in regional economic growth and identify whether central and local allocation of public spending among various sectors are growth-enhancing. Applying our analytical framework to a panel data set of 16 major states in India, we have found that, in many cases of our regressions, fiscal decentralization is positively, and even statistically significantly, associated with state economic growth. The state allocation of public spending in various sectors is broadly consistent with "growth-maximizing", whereas increases in the central allocation of its budget among development projects, nondevelopment projects, and social and community services by cutting the center¡¯s spending on all other functions can promote regional growth. Furthermore, the distortionary effect of the state tax in India is dominated by the productive effect of tax-financed public spending, whereas the reverse holds for the central tax.

The growth impact of intersectoral and intergovernmental allocation of public expenditure: With applications to China and India

The negative association between fiscal decentralization and provincial economic growth has been found to be consistently significant and robust in China. For India, however, we have found that fiscal decentralization is positively, and even statistically significantly, associated with state economic growth. The state allocation of public spending in various sectors is broadly consistent with ¡°growth maximizing,¡± whereas increases in the central allocation of its budget among development projects, nondevelopment projects, and social and community services by cutting the center's spending on all other functions can promote regional growth.Fiscal decentralization, Public spending, Growth, Chinese economy, Indian economy

Fiscal decentralization, public spending, and economic growth in China

The authors of this report use data on China to demonstrate how the allocation of fiscal revenue and expenditures between central and local governments has affected economic growth since reforms that began in the late 1970s. They find a higher degree of fiscal decentralization associated with lower provincial economic growth over the past 15 years in China. This implies that fiscal reforms begun in China in the early 1980s have probably failed to promote the country's economic growth. This result is consistently significant and robust in their empirical examinations, and is surprising in light of the argument that fiscal decentralization usually contributes positively to provincial or local economic growth.Public&Municipal Finance,Public Sector Economics&Finance,Urban Economics,Economic Theory&Research,Banks&Banking Reform,Urban Economics,Economic Theory&Research,Public Sector Economics&Finance,National Governance,Public&Municipal Finance

Signals Controlling Regulatory T Cell Differentiation and Homeostasis

CD4+Foxp3+ regulatory T cells (Treg)s are essential for the prevention of autoimmunity. Treg lineage commitment requires T cell receptor (TCR) interactions that induce expression of foxp3, whose protein product enforces Treg fate. Treg homeostasis is critical for self-tolerance and is achieved through both Treg generation and maintenance. Treg maintenance occurs in part through a process of self-renewing cell division of existing Tregs. This self-renewing Treg division has been shown to be TCR dependent. Despite the crucial role of the TCR in Treg generation and maintenance, neither the specific signaling pathways that control Treg generation nor the nature of the TCR signals required for their division in the periphery are well understood. Here, we demonstrated that dendritic cells (DC)s coordinate Treg division in vitro. DCs elicit interleukin-2 (IL-2) production from conventional CD4+ T cells (Tconv)s in a major histocompatibility complex class II (MHCII)-dependent fashion. Tconv-derived IL-2 cooperates with contact-dependent signals from DCs to induce Treg division. Contrary to prior studies, we showed that in the presence of exogenous IL-2, Treg division becomes MHCII-independent in vitro. Treg division required only MHCII-independent DC-derived signals and a source of IL-2. Next, we found that peripheral Tregs can divide in the absence of TCR signaling in vivo if exogenous IL-2 receptor (IL-2R) agonists are administered. Furthermore, activation of the IL-2-induced STAT5 pathway is minimally sufficient to support Treg division independent of TCR signaling. These data suggest that depending on the degree of concomitant IL-2 receptor/STAT5 activation, a range of TCR signals can sustain Treg division. In addition to Treg division, we also investigated the TCR signals that promote Treg development. Our preliminary experiments showed that diacylglycerol (DAG) signaling promotes Treg differentiation. Deletion of diacylglycerol kinase ζ, a negative regulator of this pathway, resulted in augmented DAG signaling and enhanced Treg generation. We hypothesize that DAG signaling enhances NF-κB activation through c-Rel, a transcription factor known to promote Treg differentiation directly. Future studies are necessary to establish the DAG pathway as a link between TCR signaling and Treg differentiation