This dissertation examines, both theoretically and empirically, the impact of expenditure decentralization and decision-making in education on education output measured through net enrollment rates, repetition rates, dropout rates, completion rates, and test scores in science at the primary school level. We develop a theoretical model based on a behavioral production function model that investigates the potential direct effects of education decentralization on output, and indirect effects of education decentralization through its impact on family, school and teacher inputs. We develop an unbalanced panel data model of education decentralization by using various econometric estimators on a dataset of fifty-nine countries, developed and developing countries, covering the period 1970-2004 in five-year intervals. The empirical analysis in this dissertation improves upon previous empirical studies of education decentralization by using up-to-date comparative international data over time on measures of education decentralization and various indicators of primary schooling. We find empirical support that expenditure decentralization in education significantly improves repetition rates, dropout rates, completion rates and test scores at the primary school level. We are unable to find a significant effect on primary net enrollment rates. Further, we find that decisions on education planning and personnel management have a greater influence on education output when taken at the intermediate level of government (states and provinces). At the same time we find that allocating decisions on education at the school level can also significantly improve education output. Our empirical results support the hypothesized positive link between education decentralization and education outcomes. Additionally, this study is consistent with the recent trend towards decentralizing education around the world.

This dissertation consists of two independent essays on public economics. The first essay studies the consequences of fiscal decentralization on poverty and income inequalities. This essay describes the possible channels through which fiscal decentralization might affect poverty and income inequalities, and carries out an empirical analysis with data of a large number of countries at different stages of development, for the period 1971-2000. Fiscal decentralization is found to have significant effects on poverty and income inequalities. These findings are important because they suggest, contrary to the traditional public finance theory, that sub-national governments can play an important role in the reduction of poverty and income inequalities. The second essay studies the second best solution to the public expenditures’ problem in the presence of a proportional labor income tax. By allowing the tax base to vary with the taxpayers’ behavioral responses to taxation, we derive the “effective” budget constraint faced by the government, which describes the set of affordable combinations of public and private goods. We show that the optimal solution to the government problem corresponds to the point of tangency between the effective budget constraint and the highest attainable social indifference curve. The traditional normative prescription for public expenditures under a second-best scenario does not satisfy this condition, and therefore it provides a suboptimal solution. Finally, we use the same analytical framework in order to explain the flypaper effect, an empirical regularity that has for long challenged the conventional theory.

This dissertation contributes to the definition of an analytical framework for the study of optimal jurisdictional size for local service delivery. We argue that the standard economics framework for the analysis of optimal jurisdictional size importantly neglects individual preferences for political accountability. Our theoretical model shows that once we take into account such preferences, the optimal jurisdictional size for the provision of local public goods is smaller than in the standard model. We obtain empirical evidence to support our hypothesis from a sample of 197 countries. Our results show that, in fact, demand for political accountability leads to higher jurisdictional fragmentation both in terms of greater number of jurisdictions and smaller average population per jurisdiction. In addition, a meta-analysis of the empirical contributions to the study of economies of scale in the provision of local services shows that the economies of scale expected from service provision to larger jurisdictional sizes may not be present except for a handful of local services, and limited to relatively small population sizes. The results of the meta-analysis signal moderately increasing to constant returns to scale in the provision of traditional local services. In light of these results, we argue that forced jurisdictional consolidation programs across the world justified by perceptions of excessive jurisdictional fragmentation, or by the expectation of large expenditure savings due to economies of scale may have been, thus, erroneously designed. From a policy perspective, multi-layered institutional frameworks for service delivery (including cooperation and privatization among other options) may allow targeting available efficiency gains more efficiently than consolidation.

This dissertation contributes to the definition of an analytical framework for the study of optimal jurisdictional size for local service delivery. We argue that the standard economics framework for the analysis of optimal jurisdictional size importantly neglects individual preferences for political accountability. Our theoretical model shows that once we take into account such preferences, the optimal jurisdictional size for the provision of local public goods is smaller than in the standard model. We obtain empirical evidence to support our hypothesis from a sample of 197 countries. Our results show that, in fact, demand for political accountability leads to higher jurisdictional fragmentation both in terms of greater number of jurisdictions and smaller average population per jurisdiction. In addition, a meta-analysis of the empirical contributions to the study of economies of scale in the provision of local services shows that the economies of scale expected from service provision to larger jurisdictional sizes may not be present except for a handful of local services, and limited to relatively small population sizes. The results of the meta-analysis signal moderately increasing to constant returns to scale in the provision of traditional local services. In light of these results, we argue that forced jurisdictional consolidation programs across the world justified by perceptions of excessive jurisdictional fragmentation, or by the expectation of large expenditure savings due to economies of scale may have been, thus, erroneously designed. From a policy perspective, multi-layered institutional frameworks for service delivery (including cooperation and privatization among other options) may allow targeting available efficiency gains more efficiently than consolidation.

無 / The purpose of this study is to investigate the effect of fiscal decentralization on the tax effort of China’s local government after the Fiscal Reform was implemented in 1994. This study defines the tax effort as the ratio of the tax revenue of local government to its tax capacity, which is measured by per capita income, GRP (gross regional product), TTR (total taxable resources) and RTS/R (the representative tax system with regression analysis). Using official panel data for 31 provinces/cities during the 1996-2004 period and the two-way fixed effects model with different tax effort indices as the dependent variable, the primary finding of this study is that fiscal decentralization has a statistically significant and positive influence on the local government tax effort in China after 1994. That is to say, a local government with a higher degree of fiscal autonomy might put more effort into tax collection than its counterparts with a lower degree of fiscal autonomy.

Atkūrus nepriklausomybę Lietuvos fiskalinėje politikoje įvyko daug labai svarbių permainų: įvestas fiskalinis valdymas, tinkantis rinkos sąlygoms; mokesčių reforma iš esmės pakeitė valstybės pajamų sandarą, o valstybės finansų išlaidų sąrangą buvo pakeista perskirstant funkcijas tarp įvairių valdymo lygių ir skolos valdymas iškilo kaip visai nauja viešųjų finansų sritis. Šio darbo tema – “Lietuvos savivaldybių biudžetai (Vilniaus miesto savivaldybės biudžeto pavyzdžiu) ir biudžeto reforma Lietuvoje”. Pasirinka tema yra labai aktuali. Šiuo metu Lietuvoje vykdoma biudžeto reforma, kuria siekiama pagerinti valstybės bei savivaldybių biudžetų planavimą bei biudžeto procedūras, patobulinti finansinių išteklių valdymą ir kontrolę, o taip pat spręsti klausimus susijusius su Europos Sąjungos finansine parama. Nagrinėjant savivaldybių biudžetų klausimus, vienas svarbiausių ir aktualiausių - kokio lygio turi būti savivaldybių fiskalinis savarankiškumas. / The subject of the thesis is “Budgets of Lithuanian Municipalities (on the example of Vilnius City Municipality Budget) and Budget Reform in Lithuania.” The subject is very urgent. At present the budget reform is being carried out in Lithuania, and the aim of the reform is to improve planning and procedures of national and municipal budgets, to perfect management and control of financial resources and also to solve the problems related to the European Union budget. Considering the budget problems of municipalities one of the most important and urgent problems is what the level of fiscal-dependence of municipalities should be. The purpose of the thesis is to consider financing of municipality budgets and to analyse and evaluate the main regulations of the budget system reform in Lithuania and to present the conclusions. To reach the purpose, the following tasks are raised in the thesis: to examine Lithuanian budget system; to consider fiscal decentralization level in Lithuania; analyse the structure of finance in Lithuanian municipalities and describe the municipality budget; to consider and evaluate the budget reform. The thesis raises the following hypothesis: municipalities do not have fiscal self-dependence enough, that is why not all principles of the budget reform are effectively put into practise.

Vyriausybė gali daryti įtaką tiek bendrai šalies ekonominei politikai, tiek konkrečiai nedarbui ir infliacijai, manipuliuodama savo pajamų ir išlaidų politikomis, siekdama paveikti visuminę paklausą, taigi ir gamybos apimtį. Vyriausybės pajamų ir išlaidų politikos yra jos fiskalinės politikos instrumentai. Fiskalinė disciplina derinama prie pasirinktų šalies ūkio vystymosi krypčių ir prioritetų. Šio darbo tikslas – reaguojant į kintančią ekonominę situaciją atlikti Lietuvos fiskalinės politikos analizę, iškelti pagrindinius privalumus ir trūkumus, numatyti trūkumų pašalinimo kryptis bei pateikti prognozes ateičiai. / Fiscal policy refers to the government`s spending and taxing behaviour and generaly is devided into few categories: decisions regarding government budget policypolicies related to government purchases of goods, servicies and labour; policies regarding taxes (for instance, tax rates are controlled by the government) and expenditures; policies regarding transfer payments (such as unemployment and social security benefits, wellfare payments ant state pensions); decisions involving state debt managing and administration. Fiscal discipline is strongly affected by general state economical goals and strategy. The main goal of the work is to analyse the mechanism of Lithuanian fiscal policy, find and emphasize main qualities and imperfections, the ways to avoid regress and create personal forecasts for future according to variable economical situation.

My dissertation investigates the effects of citizen participation and subnational fiscal arrangements on the success of fiscal decentralization efforts in Vietnam. Using cluster analysis and regression analysis, I find that the success of decentralization efforts, explains not only by the degree of decentralized fiscal responsibilities and the proximity of local government, but also by the involvement of citizens in service delivery. I further identify that the sheer existence of participatory mechanisms in local service delivery does not promise better service provision. In some cases, participation may hurt such provision. My dissertation provides a unique glimpse into the effects of citizen participation in a highly centralized political system. The results of this dissertation contribute to the study of public governance in Asia and the broader comparative literature on decentralization.

The aim of this thesis is to analyse the system of tax sharing and grants in terms of interregional redistribution. Review of literature is divided into two parts. The first one relates to fiscal decentralization, fiscal imbalance (which arises as a result of decentralization), and fiscal need. The second part deals with the technical characteristics of shared taxes and subsidies in the Czech Republic. Based on established methodological procedures were carried out analysis of both systems. It was found out that into the budgets of local governments are redistributed funds which do not come from their territory. The result of analysis is the finding that both systems are based on the interregional redistribution. Last part of this thesis focuses on a brief analysis of the planned amendment.

The diploma thesis on the Status and Importance of Local Taxes is focused on a part of tax revenues of municipalities, which are called local taxes according to the budget structure. These revenues are the returns of the municipalities and are of an optional nature. Despite their nature, Act No. 565/1990 Coll., On Local Taxes, limits the tax jurisdiction for setting the charging rate. The aim of the thesis is to analyse the local taxes of a selected region of the Czech Republic on the basis of theoretical knowledge and legislation related to local taxes. For this work, the Vysočina Region was selected. At the beginning, development of taxes in the Czech Republic in 2006 2016 is described. Subsequently, the work goes to the development of Vysočina Region, where local taxes are broken down by particular types. The next chapters are devoted to local charges according to their division in the budget structure in terms of their share on revenues in municipalities in 2016 and the frequency of utilization of the respective taxes in the same year. Based on the calculations, it was found out that the average share of revenues from local taxes on tax revenues in 2006-2011 was around 1.80 %. By introducing a local tax for municipal waste, the share increased and was around 3 % in 2012-2016. This difference was due to the fact that the tax for municipal waste is the major part of the revenue from local taxes, approximately 88 %. The analysis also shows that the most common tax is the one for owning dogs. However, its share on total revenues of local taxes accounted for only 4.3 %. A smaller share (3.78 %) is recorded only by the revenue from the tax for use of the public area, the other taxes got minor contribution.