IDEAS home Printed from https://ideas.repec.org/a/zan/ecszan/v29y2024i1p44-60.html
   My bibliography  Save this article

The Impact of Fiscal Decentralization on Selected Macroeconomic Variables at the County Level in Romania from 1999 to 2023

Author

Listed:
  • Alina Georgeta AILINCÄ‚

    (Victor Slăvescu Centre for Financial and Monetary Research, “Costin C. Kiriţescu†National Institute for Economic Research, Romanian Academy, Bucharest, Romania)

Abstract

In addition to the information held at the national level, regional statistics can provide extremely valuable information regarding disparities at the local level. Thus, this paper explores the impact of fiscal decentralization on some important macroeconomic parameters at the subnational level. The article uses a panel econometric model to analyze the impact of fiscal decentralization on variables such as employment, nominal salary and gross added value at the county level in Romania in the period 1999–2023. We used the method of ordinary least squares and the techniques of extrapolation, interpolation, and Granger causality. The findings reveal that fiscal decentralization can improve certain parameters, but at the same time it must comply with certain conditions for a substantial effect at the local level. Beyond the need for a certain level of responsibility and local institutional autonomy, for a relevant impact, the decentralization process also requires a better correlation between the decentralization of local expenditures and revenues and an effective prioritization of objectives

Suggested Citation

  • Alina Georgeta AILINCÄ‚, 2024. "The Impact of Fiscal Decentralization on Selected Macroeconomic Variables at the County Level in Romania from 1999 to 2023," Economy and Contemporary Society, Gheorghe Zane Institute for Economic and Social Research ( from THE ROMANIAN ACADEMY, JASSY BRANCH), vol. 29(1), pages 44-60.
    • Handle: RePEc:zan:ecszan:v:29:y:2024:i:1:p:44-60
    as

    Download full text from publisher

    File URL: http://ices.acadiasi.ro/RePEc/zan/ecszan/2024/ECS_29_3.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Neyapti, Bilin, 2010. "Fiscal decentralization and deficits: International evidence," European Journal of Political Economy, Elsevier, vol. 26(2), pages 155-166, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manuel E. Lago & Santiago Lago-Peñas & Jorge Martinez-Vazquez, 2024. "On the effects of intergovernmental grants: a survey," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 856-908, June.
    2. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    3. Olena Chygryn & Yuriy Petrushenko & Alina Vysochyna & Anna Vorontsova, 2018. "Assessment of Fiscal Decentralization Influence on Social and Economic Development," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(4), pages 69-84.
    4. Aslim, Erkmen Giray & Neyapti, Bilin, 2017. "Optimal fiscal decentralization: Redistribution and welfare implications," Economic Modelling, Elsevier, vol. 61(C), pages 224-234.
    5. Imran Hanif & Sally Wallace & Pilar Gago-de-Santos, 2020. "Economic Growth by Means of Fiscal Decentralization: An Empirical Study for Federal Developing Countries," SAGE Open, , vol. 10(4), pages 21582440209, October.
    6. Jia, Junxue & Liu, Yongzheng & Martinez-Vazquez, Jorge & Zhang, Kewei, 2021. "Vertical fiscal imbalance and local fiscal indiscipline: Empirical evidence from China," European Journal of Political Economy, Elsevier, vol. 68(C).
    7. Arif Wismadi & Mark Zuidgeest & Mark Brussel & Martin Maarseveen, 2014. "Spatial Preference Modelling for equitable infrastructure provision: an application of Sen’s Capability Approach," Journal of Geographical Systems, Springer, vol. 16(1), pages 19-48, January.
    8. Sidra Naeem & Rana Ejaz Ali Khan, 2021. "Fiscal Decentralization and Gender Equality in Developing Economies: Dynamics of Income Groups in Economies and Corruption," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(9), pages 745-761, September.
    9. Zhu, Jun & Xu, Haokun & Zhang, Yue, 2022. "Local government debt and firm productivity: Evidence from China," Research in International Business and Finance, Elsevier, vol. 63(C).
    10. Akalbeo, Benard & Martinez-Vazquez, Jorge & Yedgenov, Bauyrzhan, 2023. "Fiscal decentralization and structural versus cyclical unemployment levels," European Journal of Political Economy, Elsevier, vol. 80(C).
    11. Presbitero, Andrea F. & Sacchi, Agnese & Zazzaro, Alberto, 2014. "Property tax and fiscal discipline in OECD countries," Economics Letters, Elsevier, vol. 124(3), pages 428-433.
    12. Serhan Cevik, 2017. "Size matters: fragmentation and vertical fiscal imbalances in Moldova," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(2), pages 367-381, May.
    13. David Bartolini & Agnese Sacchi & Simone Salotti & Raffaella Santolini, 2018. "Fiscal Decentralization in Times of Financial Crises," CESifo Economic Studies, CESifo Group, vol. 64(3), pages 456-488.
    14. Gamalerio, Matteo, 2020. "Do national political parties matter? Evidence from Italian municipalities," European Journal of Political Economy, Elsevier, vol. 63(C).
    15. Shun-ichiro Bessho & Kimiko Terai, 2013. "Fiscal restraints by advisors," Economics of Governance, Springer, vol. 14(3), pages 205-232, August.
    16. Suzana Makreshanska-Mladenovska & Goran Petrevski, 2021. "Decentralisation and fiscal performance in Central and Eastern Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 33(5), pages 614-636, July.
    17. Santiago Lago-Peñas & Jorge Martinez-Vazquez & Agnese Sacchi, 2020. "Fiscal stability during the Great Recession: putting decentralization design to the test," Regional Studies, Taylor & Francis Journals, vol. 54(7), pages 919-930, July.
    18. Dirk Foremny & Agnese Sacchi & Simone Salotti, 2017. "Decentralization and the duration of fiscal consolidation: shifting the burden across layers of government," Public Choice, Springer, vol. 171(3), pages 359-387, June.
    19. Mai, Wenjun & Mai, Lijun & Chen, Yanpeng, 2025. "Assessing the expenditure decentralization in enhancing public service quality: Evidence from 29 province in China," Evaluation and Program Planning, Elsevier, vol. 110(C).
    20. Grażyna Bukowska & Joanna Siwińska-Gorzelak, 2016. "Can fiscal decentralisation curb fiscal imbalances?," Working Papers 2016-35, Faculty of Economic Sciences, University of Warsaw.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zan:ecszan:v:29:y:2024:i:1:p:44-60. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alecu Ionel Ciprian (email available below). General contact details of provider: https://edirc.repec.org/data/icessro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.