The aim of the present study is to investigate how and why a country facing issues that needed to be tackled nationwide chose to decentralise political power and financial resources when it moved from military rule to redemocratisation. Furthermore, the study examines whether the decision to decentralise taken in Brazil in the period 1981-1991 has changed the allocation of public expenditure at sub-national level, especially to education. By analysing the decision to decentralise and its results at the sub-national level, the study embodies both an upstream and a downstream approach. The upstream approach encompasses the topics related to decentralisation in the Brazilian Constituent National Assembly that sat from 1987 to 1988. Research sources are based on the archives of the Constituent National Assembly and on interviews with key political leaders in Congress and practitioners. The decision to decentralise is analysed in three dimensions: the relationship between political parties and the State; intra- and inter-party competition; and regional cleavages. The downstream approach comprises three case studies: the state of Bahia, its capital, Salvador, and its most industrialised municipality, Camacari. The political analysis is based on (a) interviews with politicians in executive and in legislative positions, and officials and (b) newspaper material as a complementary source. The financial performance is based on the analysis of expenditure extracted from balance sheets. This study fills four gaps in political-science and public-administration works on contemporary Brazil First, it deepens the understanding of how and why Brazil became such a decentralised nation. Second, it links the analysis of political and financial resources. Third, it highlights differences between levels of government in their experiences with decentralisation. Fourth, it investigates the impact of decentralisation on political arrangements and on education expenditure. The results suggest that in Brazil there was a lack of social consensus on what was to be achieved by decentralisation. They suggest that decentralisation fosters democracy but its impacts on policy results have so far been limited. The evidence further implies that decentralisation and democratisation bring about a fragmentation of power without necessarily disintegrating previous political coalitions or changing the way public resources are spent. These findings indicate that various political and economic factors influence the outcomes of decentralisation, thus exposing the limits of decentralisation on policy results.

No description available.

Diss. Uppsala : Uppsala universitet, 2006.

This thesis consists of four studies, presented in three main essays, empirically linking economic growth to public expenditure and telecommunication infrastructure using four different sample groups of countries with data from 1972-2012. In the second chapter, in Study 1, the permanent growth effects of fiscal policy are investigated across countries with different income levels using the public-policy endogenous growth model, where public spending is classified by function. The endogeneity problems associated with taxes and investment are taken into account, as is a possible non-linear relationship between government expenditure and economic growth. The results have shown that gross capital formation is the only control variable that has a significant positive coefficient in all growth regressions, while the evidence of conditional convergence hypothesis is reaffirmed. An increase in transportation and communication spending is conducive to growth in both developing and high-income countries, whereas other types of spending are not. In the third chapter, in Study 2, we firstly consider the relationship between public spending and growth with a government budget constraint. The evidence for productive expenditure being conducive to growth only exists in high-income OECD countries. Distortionary taxes are shown to have growth-deteriorating effects in both the developing country and the high-income OECD country groups. When considering the relationship between public spending and long-run GDP per capita level in Study 3, it was found that an increase in total spending financed by non-distortionary taxes enhances the per capita level of GDP in high-income OECD countries. Regardless of implicit financing elements, increases in total spending in developing countries cannot promote long-run increases in GDP per capita levels. In developing countries, increases in the shares of health care and general public services in spending can improve long-run GDP per capita. In high-income OECD countries, increasing in the share of education in spending is conducive to increasing per capita GDP in the long-run. In the fourth chapter, in Study 4, we assess the link between telecommunication infrastructure and economic development. The system of equations is used while considering stationarity and cointegration of variables in the models. The output dividend of fixed telephones in the period from 1975 to 1990 for the group of high-income OECD countries is higher than for developing countries. When considering mobile phone infrastructure, an increase in penetration has positive effects on aggregate output in developing countries for the period from 1990 to 2012. There is only weak evidence that increased mobile phone penetration in high-income OECD countries has a negative effect. When fixed telephone penetration is low, an increase in mobile phone penetration enhances aggregate output. When fixed telephone penetration is already high, an increase in mobile phone penetration might have deteriorating effects. The results have shown that mobile phone and fixed telephone infrastructures are, in fact, substitutes for one another rather than complements.

This thesis is made of five different chapters. Chp 1: OPTIMAL FISCAL AND PUBLIC EXPENDITURE POLICY IN A TWO CLASS ECONOMY This paper deals with optimal taxation and provision of public goods in a two-class economy with non linear income and linear commodity taxes. As far as optimal taxation is concerned, we first show that with two private goods the good complementary with leisure should be taxed more heavily. Second the standard income tax rules are shown to be augmented by considerations for offsetting the distortions created on the commodity markets. As to the provision of public goods we extend recent results for a two class economy with public funds raised entirely by means of a non-linear income tax system. The standard Samuelson rule is modified by two additional terms related to the self selection constraint and to the revenue of indirect taxes. They are both shown to vanish when the agents' utility functions are weakly separable between public and private goods (taken together) and leisure. Chp 2: DIRECT AND INDIRECT TAX EVASION: A SURVEY OF THE LITERATURE The purpose of this selective survey of the literature on both income and commodity tax evasion is to show in which directions, the literature has evolved. Two main approaches are identified for both direct and indirect tax evasion literature. The so-called taxpayer's point of view approach which is basically an exercise of maximization under uncertainty and the so-called tax collector's point of view which is a refinement of the Mirrlees-Stiglitz approach to income taxation and of the Ramsey approach to commodity taxation. The current state of the art is such that both approaches share similar strengths and weaknesses. Chp 3: TAX STRUCTURE, TAX REFORM AND TAX EVASION In this paper we explore whether the shift from an ad valorem tax to a value added tax (which is a prerequisite to join the European Union) improves the "integrity" (number of people in the regular market) and the "efficiency" (total tax revenues) of the tax system. A model of two parallel (black and regular) markets is analyzed. The production in both the black and the regular market is divided in three stages: raw material, intermediate good and final good. Firstly, we prove that if an ad valorem tax is levied, at all stages of the regular market, any, even partial, tax reform towards VAT unequivocally increases integrity (the number of agents). Secondly, we prove that efficiency of the tax system is a direct function of its integrity. Therefore a tax reform from ad valorem to VAT seems justifiable under these two criteria. As a passing result, regular market consumers' welfare is shown to increase. Chp 4. A NOTE ON CORRUPTION, PRODUCTION AND SHORTAGE IN USSR AND RUSSIA Shleifer and Vishny, 1992 argue that privatization increases production and reduces shortage; Komai, 1979 argues that privatization reduces both production and shortage. The transition from USSR to Russia reduced both production and shortage. We argue that this is just the result of the shrinking of the loss-making sector (industrial sector) and the expansion of the profit-making sector (the service sector and namely trade and retailing). We also argue that the validity of Kornai's model is limited to those firms which are overproducing (i.e. more than the profit maximization quantity) and the validity of Shleifer and Vishny's model is limited to those firms which are underproducing. This reconciles two otherwise contradictory papers. Chp 5: LABOUR MARKET REALLOCATION AND RENT-SEEKING IN TRANSITION ECONOMY We present a simple two-sector model of the Russian labour market. Starting from a "full-employment" equilibrium with no search (the USSR), we analyze the path to the new equilibrium with unemployment and search (Russia). The links between the fraction of people searching, the wage differential and the hiring and firing probability of both sectors are investigated. A tentative way to compute these probabilities is proposed starting from recent (91-94) Russian data on unemployment and wages. It is shown that the wage differential across sectors rises with the strengthening of the entry barriers. It is argued that if no action is taken by the Authorities to fight unemployment and to reduce the wage differential across sectors (e.g. relaxing the entry barriers to the most productive sector), the market will react by developing, as an endogenous alternative to unemployment, a third sector which would act as a rent seeking one against the most productive sector. This will increase the outflow of workers from the least productive sector. Finally, it is shown that if the fraction of rent-seeking people attains a critical mass the above-mentioned policies may not be enough to rid the economy of the rent-seeking sector.

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The affairs of public financial management in the local government operates within two legal frameworks, one adopted by national government and one adopted by legislatures at local level (Mikesell, 2007:36). A legislative framework for public financial management includes a vast number of legislation and public policies that have a direction bearing on the way in which financial management is dealt with in the different spheres of government. The financial affairs in the local government are guided by various legislative frameworks which regulate financial management in the three spheres of government. The Municipal Finance Management Act (MFMA) Act 56 of 2003 in addition provides guidelines for securing sound and sustainable financial management. The need to achieve sound public financial management and assurance of acceptable and transparent levels of financial risk has become paramount. To realize the developmental mandate, the Integrated Development Plan (IDP) and budgeting are seen as the most significant tool towards effective public financial management. Government activities require funds to undertake the planned activities and such funds require special care to safeguard the public funds. This study aimed to assess the budgetary control practices in the Ngwathe Local Municipality. The objectives were realized by means of literature review, questionnaires and participant observations. The results of the interviews with the participants (community) revealed that the public is somehow not interested in local government affairs. It was indicated that they are mostly concerned about the social affairs and the job opportunities. The interviews with the municipality revealed that the budgetary control mechanisms are effective. Budget management is a requirement that covers budget preparation, budget implementation, and budget control. The Municipality established the budget office which serves as a mediator between the municipal council and the departmental managers. A good budget is characterized by participation, comprehensiveness, standards, flexibility, feedback and analyses of cost and revenues. However, the municipality should enhance the culture of community participation in local governance. / MA (Public Management and Governance), North-West University, Vaal Triangle Campus, 2014

The overarching aim of this study is to examine the significance of public expenditure management (PEM) for primary education outcomes in public schools in two South African provinces (Gauteng and North West). The study examines whether technical and allocative inefficiencies in public spending have a significant impact on education outcomes (measured by pass, repetition and dropout rates). In doing so, the study makes an important contribution to the economics of education literature, where the determinants of good education outcomes remain ambiguous. Using cross-sectional data from 175 public primary schools, the study finds evidence of technical inefficiencies in terms of misappropriation of education funds (leakages) and delays in remitting funds. While the occurrences of leakages are not strongly associated with poor education outcomes, the study finds a strong positive correlation between delays and Grade 1 repetition. In terms of allocative efficiency, the study finds no evidence that public expenditure is significantly associated with education outcomes. This remains true for public spending even when the redistributive component (the disproportional allocation of funds to disadvantaged schools) is taken into account. Total resource wealth (including public and private contributions) only matters when interacted with certain poverty quintiles and class sizes. The findings from the OLS and negative binomial regression analyses reveal that increased spending on learning and teaching support (LTSM) materials is strongly associated with lower Grade 1 repetition rates. The relationship is even stronger when LTSM spending is interacted with socio-economic status. The study also finds that repetition rates are strongly driven by poverty indicators at the district level while dropout rates are strongly driven by district and school inefficiency

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The affairs of public financial management in the local government operates within two legal frameworks, one adopted by national government and one adopted by legislatures at local level (Mikesell, 2007:36). A legislative framework for public financial management includes a vast number of legislation and public policies that have a direction bearing on the way in which financial management is dealt with in the different spheres of government. The financial affairs in the local government are guided by various legislative frameworks which regulate financial management in the three spheres of government. The Municipal Finance Management Act (MFMA) Act 56 of 2003 in addition provides guidelines for securing sound and sustainable financial management. The need to achieve sound public financial management and assurance of acceptable and transparent levels of financial risk has become paramount. To realize the developmental mandate, the Integrated Development Plan (IDP) and budgeting are seen as the most significant tool towards effective public financial management. Government activities require funds to undertake the planned activities and such funds require special care to safeguard the public funds. This study aimed to assess the budgetary control practices in the Ngwathe Local Municipality. The objectives were realized by means of literature review, questionnaires and participant observations. The results of the interviews with the participants (community) revealed that the public is somehow not interested in local government affairs. It was indicated that they are mostly concerned about the social affairs and the job opportunities. The interviews with the municipality revealed that the budgetary control mechanisms are effective. Budget management is a requirement that covers budget preparation, budget implementation, and budget control. The Municipality established the budget office which serves as a mediator between the municipal council and the departmental managers. A good budget is characterized by participation, comprehensiveness, standards, flexibility, feedback and analyses of cost and revenues. However, the municipality should enhance the culture of community participation in local governance. / MA (Public Management and Governance), North-West University, Vaal Triangle Campus, 2014