Formal and informal institutions are often viewed as complements or substitutes in empirical and theoretical works. However, no evidence of complementarities or substitutes is found in our empirical analysis of the interrelation between formal and informal decentralization across 64 provinces of Vietnam. This paper finds that the formally decentralized system of public service supply is accommodating the informal one, but informal decentralization in public order provision tends to compete with the existing ineffective formal system. This implies that the central government needs to reorganize the system of decentralizing the provision of public goods/services and public in order to make informal institutions complementary rather than rival or free-riding on formal ones.
{"title":"The Interrelationship between Formal and Informal Decentralization and its Impact on Sub-Central Governance Performance: The Case of Vietnam","authors":"Thanh Thuy Vu, Messaoud Zouikri, B. Deffains","doi":"10.1093/CESIFO/IFU003","DOIUrl":"https://doi.org/10.1093/CESIFO/IFU003","url":null,"abstract":"Formal and informal institutions are often viewed as complements or substitutes in empirical and theoretical works. However, no evidence of complementarities or substitutes is found in our empirical analysis of the interrelation between formal and informal decentralization across 64 provinces of Vietnam. This paper finds that the formally decentralized system of public service supply is accommodating the informal one, but informal decentralization in public order provision tends to compete with the existing ineffective formal system. This implies that the central government needs to reorganize the system of decentralizing the provision of public goods/services and public in order to make informal institutions complementary rather than rival or free-riding on formal ones.","PeriodicalId":149513,"journal":{"name":"PSN: Public Service Delivery (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2012-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115925279","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study uses a statistical model to examine which institutional factors influence the number of businesses created in a local area. It uses a survey of mayors, city council members and executives from thirteen countries in Latin America to gauge whether they implement pro-business policies. The analysis considers fiscal, administrative and political autonomy as influential factors and controls for municipal environmental factors. The outcome shows that whereas political autonomy and business friendly policies at the local level are important in attracting new businesses to the municipality, administrative and fiscal autonomy are less influential. The importance of this research lies in the theoretical analysis, which evaluates whether mayors and other local authorities see themselves as agents of growth. Specifically, the following questions are addressed. Does government structure matter to support municipalities with the appropriate level of economic policies? Does fiscal, political or administrative decentralization increase the production of small and medium size enterprises (SMEs)? This paper is organized into the following sections. First, it briefly summarizes the development attempts in Latin America and describes why entrepreneurship is key for equitable growth. Second, it provides a theoretical perspective as to why local government is needed to promote business friendly policies and ultimately economic development. Finally, this paper tests the proposed theoretical perspective and provides tentative conclusions.
{"title":"Fiscal Decentralization: Explaining Successful Local Economic Development in Latin America","authors":"Heidi Jane M. Smith","doi":"10.2139/ssrn.1726068","DOIUrl":"https://doi.org/10.2139/ssrn.1726068","url":null,"abstract":"This study uses a statistical model to examine which institutional factors influence the number of businesses created in a local area. It uses a survey of mayors, city council members and executives from thirteen countries in Latin America to gauge whether they implement pro-business policies. The analysis considers fiscal, administrative and political autonomy as influential factors and controls for municipal environmental factors. The outcome shows that whereas political autonomy and business friendly policies at the local level are important in attracting new businesses to the municipality, administrative and fiscal autonomy are less influential. The importance of this research lies in the theoretical analysis, which evaluates whether mayors and other local authorities see themselves as agents of growth. Specifically, the following questions are addressed. Does government structure matter to support municipalities with the appropriate level of economic policies? Does fiscal, political or administrative decentralization increase the production of small and medium size enterprises (SMEs)? This paper is organized into the following sections. First, it briefly summarizes the development attempts in Latin America and describes why entrepreneurship is key for equitable growth. Second, it provides a theoretical perspective as to why local government is needed to promote business friendly policies and ultimately economic development. Finally, this paper tests the proposed theoretical perspective and provides tentative conclusions.","PeriodicalId":149513,"journal":{"name":"PSN: Public Service Delivery (Topic)","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2010-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116954843","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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