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https://doi.org/10.17818/EMIP/2021/1.14

IMPACT OF POLITICAL AND FISCAL DECENTRALIZATION ON THE GOVERNMENT QUALITY IN CENTRAL AND EASTERN EUROPEAN COUNTRIES

Josip Visković orcid id orcid.org/0000-0002-8797-1496 ; Sveučilište u Splitu, Ekonomski fakultet, Split, Hrvatska
Paško Burnać ; Sveučilište u Splitu, Ekonomski fakultet, Split, Hrvatska
Maja Herman ; Panturist d.d.


Puni tekst: engleski pdf 442 Kb

str. 285-302

preuzimanja: 160

citiraj


Sažetak

Since the 1970s, the process of decentralization has spread throughout the world, and today more than 95% of democratic countries are decentralized. Decentralization should lead to a well-organized and more efficient local government. Nevertheless, the empirical results are rather vague. The motivation for this paper is to examine the impact of political and fiscal decentralization on the quality of government in seventeen countries in Central and Eastern Europe for the period 1998 - 2012. The main objective of the paper is to explore whether fiscal decentralization positively influences the quality of government and whether political decentralization reduces its positive influence. An additional contribution of the paper comes from the introduction of a decentralization interaction variable. Our results have shown that fiscal decentralization has a positive impact on governance, while political decentralization was found to be statistically insignificant. Our results also showed that richer countries have higher government quality, that government size increases the level of corruption and decreases government quality, and that in more democratic countries politicians behave more responsibly and accountably, which decreases the level of corruption and increases government quality. We conclude that political decentralization cancels out the positive effects of fiscal decentralization on the quality of government, which can be explained by less developed institutions at the local level in Central and Eastern European countries.

Ključne riječi

fiscal decentralization, political decentralization, government quality, CEE countries

Hrčak ID:

258657

URI

https://hrcak.srce.hr/258657

Posjeta: 284 *