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Fiscal Decentralization And Economic Growth Of Vietnamese Provinces: The Role Of Local Public Governance

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  • Su Dinh THANH
  • Nguyen Phuc CANH

Abstract

This study offers an insight into the public governance role in the relationship between fiscal decentralization and provincial economic growth in Vietnam. Fiscal decentralization measures are assorted. Applying a sequential (two‐stage) estimation for the panel data of 62 provinces of Vietnam over the 2006–2015 period, we find that first, fiscal decentralization is positively related to the economic growth of Vietnamese provinces. Second, the effects of public governance on economic growth vary across provinces depending on various levels of local public governance. Interestingly, the effect of fiscal decentralization is strengthened when this variable is added along with better quality of public governance. In a region of high public governance quality, fiscal decentralization exerts a positive effect on its economic growth. Our findings imply that the design of fiscal decentralization needs to be associated with local governments’ ability of public governance to improve the local economic growth.

Suggested Citation

  • Su Dinh THANH & Nguyen Phuc CANH, 2020. "Fiscal Decentralization And Economic Growth Of Vietnamese Provinces: The Role Of Local Public Governance," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(1), pages 119-149, March.
    • Handle: RePEc:bla:annpce:v:91:y:2020:i:1:p:119-149
    DOI: 10.1111/apce.12255
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    Cited by:

    1. Tran Thi Kim Oanh, 2024. "Impact of fiscal decentralisation on economic growth in Vietnam—A spatial regression approach," Australian Economic Papers, Wiley Blackwell, vol. 63(2), pages 258-282, June.
    2. Su, Thanh Dinh & Nguyen, Canh Phuc, 2021. "Twin balances, public governance and private investment: Quantile estimation for OECD countries," International Economics, Elsevier, vol. 165(C), pages 85-93.
    3. Manh‐Tien Bui & Thai‐Ha Le & Donghyun Park, 2023. "Impacts of fiscal decentralization on local development in Vietnam: A disaggregated analysis," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(1), pages 3-31, January.
    4. Omodero Cordelia Onyinyechi, 2022. "Fiscal Federalism, Tax Independence and Social Enhancement," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 32(4), pages 1-15, December.
    5. Pedro Jorge Holanda Figueiredo Alves & Jevuks Matheus Araujo & Ana Karolina Acris Melo, 2023. "Fiscal decentralization and economic growth: evidence from Brazilian states," Public Sector Economics, Institute of Public Finance, vol. 47(2), pages 255-280.
    6. Canh, Nguyen Phuc & Schinckus, Christophe & Thanh, Su Dinh & Hui Ling, Felicia Chong, 2020. "Effects of the internet, mobile, and land phones on income inequality and The Kuznets curve: Cross country analysis," Telecommunications Policy, Elsevier, vol. 44(10).
    7. Bach Nguyen & Nguyen Phuc Canh & Su Dinh Thanh, 2021. "Institutions, Human Capital and Entrepreneurship Density," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(3), pages 1270-1293, September.
    8. Ho Dan Doan, Tam & Thai Thuong Le, Quan & Nguyen, Quyen Le Hoang Thuy To & Nguyen, Phong Thanh & Thi Ngoc Dang, The, 2022. "Integrating of PLS-SEM and the Importance Performance Matrix Analysis to Exploring the Role of Provincial Competitiveness Index to Growth," MPRA Paper 116830, University Library of Munich, Germany, revised Jul 2022.
    9. Alena F. Kireyeva & Kiryl V. Rudy, 2024. "Paradoxes of the Anti-crisis Role of Fiscal Federalism: Analytical Review of Studies," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 3, pages 86-97, June.
    10. Nguyen, Canh Phuc & Su, Thanh Dinh, 2022. "The influences of government spending on energy poverty: Evidence from developing countries," Energy, Elsevier, vol. 238(PA).
    11. Muhammad Shahid & Khalil Ahmad & Muhammad Mudassar Naushahi & Muhammad Amir Inayat, 2024. "Tax Decentralization and Economic Growth of Pakistan: The Role of Political Institutions," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 78-88.
    12. Bui, Duy Tung & Nguyen , Canh Phuc & Dinh , Thanh Su, 2021. "Fiscal Decentralisation and Externalities on Economic Growth: Spatial-provincial evidence from Vietnam," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 46(4), pages 31-64, December.
    13. Ruichao Liu & Xiaoyan Zhang & Pengcheng Wang, 2022. "A Study on the Impact of Fiscal Decentralization on Green Development from the Perspective of Government Environmental Preferences," IJERPH, MDPI, vol. 19(16), pages 1-22, August.
    14. Cong Minh Huynh & Hoai Nam Tran, 2021. "Moderating effects of corruption and informality on the fiscal decentralization—economic growth nexus: Insights from OECD countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 355-373, June.

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