Does Fiscal Decentralization Influence Public Finance Debt? A Panel Regression Analysis of the OECD Countries

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Published: Jul 23, 2023
DOI: https://doi.org/10.31580/apss.v11i1.2779
Keywords:
Fiscal Decentralization, Budget Balance, Public Debt, OECD

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Mohammed Ibrahim Gariba
Institute of Economics Sciences, Faculty of Economics and Administration, University of Pardubice, 532 10 Pardubice, Czech Republic
https://orcid.org/0000-0002-5358-0155
Romana Provazníková
Institute of Economics Sciences, Faculty of Economics and Administration, University of Pardubice, 532 10 Pardubice, Czech Republic
https://orcid.org/0000-0001-5584-5690

Abstract

Fiscal decentralization has recently gained popularity throughout the world. This study examines how revenue decentralization influences subnational budgetary balances and how it affects the general government debt in the OECD countries. We applied panel regression analysis to an annual panel dataset that includes data from 23 countries from 1990 to 2020. Then, we explore the relationship between fiscal/revenue autonomy and public finance debt thus budgetary balances at the SNG level. Our empirical findings suggest that higher levels of SNG budget discipline are associated with greater revenue autonomy. The findings also suggest that general governments should consider delegating greater fiscal autonomy to SNGs to achieve better fiscal outcomes, including lower levels of general government public debt. This information could be useful for policymakers who are looking to implement sustainable fiscal stewardship.

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How to Cite
Gariba, M. I., & Provazníková, R. (2023). Does Fiscal Decentralization Influence Public Finance Debt? A Panel Regression Analysis of the OECD Countries. Asia Proceedings of Social Sciences, 11(1), 128–132. https://doi.org/10.31580/apss.v11i1.2779
Issue
Vol. 11 No. 1 (2023): ASIA Proceedings of Social Sciences
Section
8th ASIA International Conference 2022
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This work is licensed under a Creative Commons Attribution 4.0 International License.

Author Biographies

Mohammed Ibrahim Gariba, Institute of Economics Sciences, Faculty of Economics and Administration, University of Pardubice, 532 10 Pardubice, Czech Republic

Fiscal decentralization has recently gained popularity throughout the world. This study examines how revenue decentralization influences subnational budgetary balances and how it affects the general government debt in the OECD countries. We applied panel regression analysis to an annual panel dataset that includes data from 23 countries from 1990 to 2020. Then, we explore the relationship between fiscal/revenue autonomy and public finance debt thus budgetary balances at the SNG level. Our empirical findings suggest that higher levels of SNG budget discipline are associated with greater revenue autonomy. The findings also suggest that general governments should consider delegating greater fiscal autonomy to SNGs to achieve better fiscal outcomes, including lower levels of general government public debt. This information could be useful for policymakers who are looking to implement sustainable fiscal stewardship.

Romana Provazníková, Institute of Economics Sciences, Faculty of Economics and Administration, University of Pardubice, 532 10 Pardubice, Czech Republic

Fiscal decentralization has recently gained popularity throughout the world. This study examines how revenue decentralization influences subnational budgetary balances and how it affects the general government debt in the OECD countries. We applied panel regression analysis to an annual panel dataset that includes data from 23 countries from 1990 to 2020. Then, we explore the relationship between fiscal/revenue autonomy and public finance debt thus budgetary balances at the SNG level. Our empirical findings suggest that higher levels of SNG budget discipline are associated with greater revenue autonomy. The findings also suggest that general governments should consider delegating greater fiscal autonomy to SNGs to achieve better fiscal outcomes, including lower levels of general government public debt. This information could be useful for policymakers who are looking to implement sustainable fiscal stewardship.