This document summarizes a study examining the relationship between fiscal decentralization and economic growth in Vietnam. The study uses panel data from 2004-2010 to empirically test the effect of different measures of fiscal decentralization on provincial GDP growth rates. The results from fixed effect models and generalized method of moments models consistently show that higher levels of fiscal decentralization, as measured by various indicators, have a significant and positive impact on economic growth across Vietnam's provinces. The findings provide empirical evidence that greater fiscal decentralization can contribute to better provincial economic performance in Vietnam.
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
Lars Calmfors, Professor of International Economics at the IIES in Stockholm, gave his comments on the 2019 report. Professor Calmfors gave this presentation in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Revenue Statistics in Asian and Pacific economies 2020OECDtax
Revenue Statistics in Asian and Pacific Economies is jointly produced by the Organisation for Economic Co-operation and Development (OECD)’s Centre for Tax Policy and Administration (CTP) and the OECD Development Centre (DEV) with the co-operation of the Asian Development Bank (ADB), the Pacific Island Tax Administrators Association (PITAA), and the Pacific Community (SPC) and the financial support from the governments of Ireland, Japan, Luxembourg, Norway, Sweden and the United Kingdom. This edition includes a special feature on the tax policy and administration responses to COVID-19 in Asian and Pacific Economies.
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
Martin Ellison, professor of Economics at the University of Oxford and a member of Economic Policy Council, presented an overview of the report in the report launch seminar in Helsinki.
For more information, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Managing Government Balance Sheet: a Focus on Public Assets - Manal Fouad, IMFOECD Governance
This presentation was made by Manal Fouad, IMF, at the 19th OECD Senior Financial Management and Reporting Officials Symposium held at the OECD Conference Centre, Paris, on 4-5 March 2019
A comment on the Economic Policy Council 2017 report by professor emeritus Lars Jonung, former Chairman of the Swedish Fiscal Policy Council 2012-2013.
Prof. Jonung gave his remarks at Finland's Economic Policy Council 2017 report launch seminar. Launch was held in Helsinki on 23rd January, 2018.
See also:
http://www.talouspolitiikanarviointineuvosto.fi/en/reports/report-2017/
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
One of the background reports of 2019 deals with the Risks of the Finnish Government Guarantee System. Government Counsellor Kari Parkkonen from the Ministry of Economic Affairs and Employment gave his comments in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, including the full EPC 2019 report as well as all five background reports, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
Lars Calmfors, Professor of International Economics at the IIES in Stockholm, gave his comments on the 2019 report. Professor Calmfors gave this presentation in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Revenue Statistics in Asian and Pacific economies 2020OECDtax
Revenue Statistics in Asian and Pacific Economies is jointly produced by the Organisation for Economic Co-operation and Development (OECD)’s Centre for Tax Policy and Administration (CTP) and the OECD Development Centre (DEV) with the co-operation of the Asian Development Bank (ADB), the Pacific Island Tax Administrators Association (PITAA), and the Pacific Community (SPC) and the financial support from the governments of Ireland, Japan, Luxembourg, Norway, Sweden and the United Kingdom. This edition includes a special feature on the tax policy and administration responses to COVID-19 in Asian and Pacific Economies.
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
Martin Ellison, professor of Economics at the University of Oxford and a member of Economic Policy Council, presented an overview of the report in the report launch seminar in Helsinki.
For more information, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Managing Government Balance Sheet: a Focus on Public Assets - Manal Fouad, IMFOECD Governance
This presentation was made by Manal Fouad, IMF, at the 19th OECD Senior Financial Management and Reporting Officials Symposium held at the OECD Conference Centre, Paris, on 4-5 March 2019
A comment on the Economic Policy Council 2017 report by professor emeritus Lars Jonung, former Chairman of the Swedish Fiscal Policy Council 2012-2013.
Prof. Jonung gave his remarks at Finland's Economic Policy Council 2017 report launch seminar. Launch was held in Helsinki on 23rd January, 2018.
See also:
http://www.talouspolitiikanarviointineuvosto.fi/en/reports/report-2017/
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
One of the background reports of 2019 deals with the Risks of the Finnish Government Guarantee System. Government Counsellor Kari Parkkonen from the Ministry of Economic Affairs and Employment gave his comments in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, including the full EPC 2019 report as well as all five background reports, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
This year, one of the background reports looks at the assessment of risks of the Finnish Government Guarantee System. Professor of Economics Juha Junttila of the University of Jyväskylä, presented key finding in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, including the full EPC 2019 report and all five background reports, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
Director General, Dr. Markus Sovala from the Ministry of Finance, gave his remarks on the report. He gave his comments in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, including the full EPC 2019 report, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Presentation by professor Torben M. Andersen at Finland's Economic Policy Council 2017 report launch seminar. Launch was held in Helsinki on 23rd January, 2018.
See also:
http://www.talouspolitiikanarviointineuvosto.fi/en/reports/report-2017/
This paper investigates the relationship between tax structures and economic growth in a panel of developed and developing countries, using the new ICTD GRD. It sought to understand the effects of tax structure on GDP growth, since many previous studies have only focused on OECD countries.
It is also motivated by the IMF Policy prescription (IMF 2011), of on-going shift from reliance on trade taxes to VAT, especially in low income countries. It further sought to understand the implications of such structural shifts with studies showing that revenue recovery following trade liberalisation has been poor in low- and middle- income countries (Baunsgaard & Keen, 2010).
Results suggest that shifts away from trade and consumption toward income taxes have had a negative impact on GDP growth rates in developing countries. This negative effect is of greater magnitude through personal income taxes (PIC). Consequently, this study provides new evidence of potentially harmful effect of trade liberalisation on the GDP growth rates. The study also gives a clear picture of low tax reliance on indirect taxes between in low-income countries.
Revenue neutral shifts away from trade taxes to consumption taxes have no negative effect on growth. However, revenue neutral shifts towards income, specifically personal income taxes are potentially harmful to GDP growth rates. Key findings hold following the exclusion of resource-rich countries and after controlling for degree of openness.
Information on Fiscal Policy including that of the impact on AD and the Economics Objectives or Inflation, Economic Growth, Unemployment and Balance of Payments
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
This year, one of the background reports looks at the assessment of risks of the Finnish Government Guarantee System. Professor of Economics Juha Junttila of the University of Jyväskylä, presented key finding in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, including the full EPC 2019 report and all five background reports, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Finland's Economic Policy Council published their annual report in January 29, 2020. In the report, the Council evaluates the government’s fiscal policy and its employment-promoting policies. As in the previous reports, in addition to fiscal policy, the Council concentrates on fiscal sustainability and on the connections between social security and employment.
Director General, Dr. Markus Sovala from the Ministry of Finance, gave his remarks on the report. He gave his comments in the report launch seminar, in Helsinki, on 29 January 2020.
For more information, including the full EPC 2019 report, please see: https://www.talouspolitiikanarviointineuvosto.fi/en/home/
Presentation by professor Torben M. Andersen at Finland's Economic Policy Council 2017 report launch seminar. Launch was held in Helsinki on 23rd January, 2018.
See also:
http://www.talouspolitiikanarviointineuvosto.fi/en/reports/report-2017/
This paper investigates the relationship between tax structures and economic growth in a panel of developed and developing countries, using the new ICTD GRD. It sought to understand the effects of tax structure on GDP growth, since many previous studies have only focused on OECD countries.
It is also motivated by the IMF Policy prescription (IMF 2011), of on-going shift from reliance on trade taxes to VAT, especially in low income countries. It further sought to understand the implications of such structural shifts with studies showing that revenue recovery following trade liberalisation has been poor in low- and middle- income countries (Baunsgaard & Keen, 2010).
Results suggest that shifts away from trade and consumption toward income taxes have had a negative impact on GDP growth rates in developing countries. This negative effect is of greater magnitude through personal income taxes (PIC). Consequently, this study provides new evidence of potentially harmful effect of trade liberalisation on the GDP growth rates. The study also gives a clear picture of low tax reliance on indirect taxes between in low-income countries.
Revenue neutral shifts away from trade taxes to consumption taxes have no negative effect on growth. However, revenue neutral shifts towards income, specifically personal income taxes are potentially harmful to GDP growth rates. Key findings hold following the exclusion of resource-rich countries and after controlling for degree of openness.
Information on Fiscal Policy including that of the impact on AD and the Economics Objectives or Inflation, Economic Growth, Unemployment and Balance of Payments
Fiscal relations across levels of government and regional disparitiesOECD Governance
Presentation on Fiscal Relations Across Levels of Government and Regional Disparities made at the 2016 ZEW Public Finance Conference - Fiscal Equalisation in Europe held in Mannheim, Germany on 25-26 April 2016, made by David Bartolini, Economist, Regional Development Policy, OECD.
www.oecd.org/gov/regional-policy/
Relationship between growth, financial development and income inequality.
- Is there nonlinearity in the relationship?
- What are the factors that affect the degree of impact of financial development on income inequality?
This presentation Aid and Taxation: Exploring the Relationship Using new Data , was made by Wilson Prichard, at the launch of the ICTD new Government Revenue Dataset.
This paper aimed at re-examining cross-country evidences of the impact of aid on tax collection, by attempting to replicate Benedek et al. (2012) and Gupta et al. (2004); and conducting a new analysis, using the ICTD GRD. Indeed, the main limitations of the previous work on this topic were related to the poor quality of the data, and in some cases, failure at capturing the fact that change in tax collection is behavioural, thus arises in the medium term.
In order to correct the caveats of the existing literature, this paper tries to be innovative in many ways. First of all, the use of the ICTD GRD greatly enhances the quality of the data, thus reducing measurement error. Particular attention is given to the relationship between foreign aid, tax collection, exports and imports. Indeed, aid, by providing foreign currency, is likely to positively impact imports. Similarly, the role of non-tax revenue is clearly emphasised, which is of prior importance, especially in the case of resource-rich countries. Finally, both contemporaneously and lagged aid specifications are estimated, in order to capture the time required for behavioural changes toward tax collection.
The main conclusion ensuing from the data analyses it that the evidence of a relationship between aid (grants and loans) and tax is not robust and therefore general inferences cannot be made. This result could stem from the high heterogeneity of aid in the countries investigated, but also from the fact that aid may impact tax collection through different ways, some of them conflicting. If additional revenues from aid might dampen incentives to collect taxes, conditionality or technical assistance are features, which could also help improve efficiency at raising revenue from taxes.
Tax competition in the EU - its consequences for tax revenue structureJan Huňady
Tax Competition and its Consequences for Tax Revenue Structure in Developed Countries: Empirical Evidence Using Panel Cointegration Approach
Publication is available at:
https://doi.org/10.11118/actaun201563061913
Abstract
The paper examines the long run changes in the tax revenue structure in developed countries. We are particularly focused on the testing of a potential shift from taxation on mobile tax bases to less mobile ones, which could be seen as one of the results of rising tax competition. We assume that a decrease in corporate tax revenues is compensated for by higher tax revenues from taxing work and property. Our dataset consists of panel date from 22 OECD countries within the period 1965 to 2012. We tested the potential causalities within the tax mix using Granger causality tests as well as the DOLS and FMOLS panel cointegration techniques in order to reveal possible long run causalities. As far as we know, these techniques have not before been used in this field. Long-run inverse causalities between corporate tax and personal tax revenue as well as corporate tax revenue and indirect taxes are found. Our results could have several important implications for the tax policies in developed countries.
International Journal of Humanities and Social Science Invention (IJHSSI)inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Marco Manzo and Alessandro Modica - Finance Dept. - Italy
Giancarlo Infantino - Treasury Dept. - Italy, OECD Global Forum on Productivity – October UK Workshop - London, 14 October 2016
Similar to Fiscal decentralisation and economic growth: evidence from Vietnam (20)
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
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what is the best method to sell pi coins in 2024DOT TECH
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how to sell pi coins on Bitmart crypto exchangeDOT TECH
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1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
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6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
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It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
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Fiscal decentralisation and economic growth: evidence from Vietnam
1. Fiscal decentralisation and economic growth:
evidence from Vietnam
Crawford PhD Conference – Canberra
November 19, 2014
Tai Dang Nguyen
Crawford School of Public Policy
Australian National University
2. Outline
• Introduction
• Theoretical framework and empirical findings
• Overview of fiscal decentralisation in Vietnam
• Data and Methodology
• Empirical results
• Conclusion
Fiscal decentralisation and economic growth – Tai D. Nguyen 11/18/2014 2
3. Introduction
• Fiscal decentralisation- ongoing key reform in
many countries
• Vietnam’s economic growth performance
• Role of governance and institutional reforms
• Sparse empirical evidence
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 3
4. Introduction
• The question:
What is the effect of fiscal decentralization on
economic growth across Vietnam’s provinces?
• The current paper:
– Empirical evidence to address above question
– Newly available panel dataset
– New measures of fiscal decentralisation
– Accounts for heterogeneity of provinces and
addresses the potential endogeneity.
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 4
5. Theoretical framework and empirical
findings
• Sound theoretical foundations
– Interjurisdicational competition
(Tiebout,1956)
– Heterogeneity of local
preferences and cost of public
service provision (Oates,1972)
– Political constraints of central
governments (Oates,1999)
– Direct accountability to local
constituents
• Empirical findings on effect of
fiscal decentralisation- mixed
– Negative or insignificant impact:
(Davidoo and Zou, 1998), de
Mello (2000), …
– Positive: Lin and Liu (2000),
Kalirajan and Otsuka (2012),
Faguet and Sanchez (2008) …
EBES 13, Istanbul, Turkey 11/18/2014 5
6. Fiscal decentralisation in Vietnam
Administratively, Vietnam’s 63
provinces are grouped into 6
regions.
– Northern Mountainous
– Red River Delta
– Northern central & central
coast area
– Southeastern area
– Central highlands
– Mekong river delta
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 6
7. Fiscal decentralisation in Vietnam
• Started in the mid 90s
• Legal framework: State Budget Law (SBL) in 1996 and its
amendment in 2002.
• The 2002 SBL grants full authority for provincial governments
to make decisions on the level of decentralisation at districts
and communes governments
• Development of budget system in Vietnam during 2004-2010
period
• The State Budget is a unified budget of governments from central to
district levels
• 3 subnational levels of government (provincial, district and
commune)
• Budget planning is structured by stability periods of four or five
years
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 7
8. Fiscal decentralisation in Vietnam
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 8
30%
35%
40%
45%
50%
55%
60%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Percentage in State budget
Share of Provincial Governments in State Budget
Share in total revenue
Transfer as share of
expenditure
Share in total expenditure
9. Fiscal decentralisation in Vietnam
• Types of revenue:
• Central- level fully
assigned
• Shared revenue
• Provincial own
source revenue
• Central transfer
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 9
10. Fiscal decentralisation measurement
• Nguyen and Anwar (2009)
– Provincial share in total provincial expenditure (expenditure decentralisation) and
provincial share in total provincial revenue (revenue decentralisation)
– Focus on relative size of provinces
• FD1: Own source revenue/total provincial expenditure
• FD2: Shared revenue/total provincial expenditure
• FD3: Decentralized revenue/total provincial expenditure
(decentralized revenue = own source revenue + shared revenue)
• FDI: Composite indicator (Vo, 2009)
FDI= (
푂푅푖
푅푖
) ∗ (
푅푖
푅푖
64
푖=1
)
• FDI: Fiscal decentralisation indicator
• 푂푅푖: Own source revenue of province i
• 푅푖: Total revenue of province i
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 10
11. Data and Methodology
• Hypothesis:
Ho: Fiscal decentralisation has contributed
positively to provincial economic growth in
Vietnam.
• Models
– A fixed effect model can account for province- specific
time invariant factors
– Dynamic panel data regressions using the system
GMM estimator to address the endogeneity
concerns.
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 11
12. Model specification
풀풊풕 = 풂ퟏ푭푫풊풕 + 풂ퟐ푷풊풕 + 풂ퟑ푷푶푷풊풕 + 풂ퟒ푳풊풕 + 풂ퟓ푿풊풕
+ 풂ퟔ푩푻풊풕 + 풂ퟕ푽푨풊풕 + 휼풊 + 흀풕 + 휺풊풕
(i = 1, …, N and t=1,…, T)
• 푌푖푡: Growth rate of real gross provincial product per capita
• 퐹퐷푖푡: Fiscal decentralisation
• 푃푂푃푖푡: Population growth
• 푃푖푡: Inflation (CPI)
• 푋푖푡: Growth rate of real export value
• 퐿푖푡: Private labour growth
• 퐵푇푖푡: Growth of balancing transfer
• 푉퐴푖푡: Growth of real industrial added value
• 휆푡 : Time fixed effect
• 휂푖 : Province fixed effect
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 12
13. Results- Real
provincial per-capita
growth
regressions (FD1)
Fixed Effect Model
Independent variables FE1 FE2 FE3 FE4
FD1 (own-source revenue/total expenditure) 0.165* 0.171* 0.165 0.179*
(0.10) (0.10) (0.10) (0.10)
Inflation CPI -0.463*** -0.528*** -0.524*** -0.558***
(0.16) (0.16) (0.16) (0.16)
Population growth rate -0.614*** -0.628*** -0.630*** -0.604***
(0.16) (0.16) (0.15) (0.15)
Share of vocational students (log) -0.002 0.002
(0.01) (0.01)
Growth rate of per capita non state capital 0.002 0.005
(0.01) (0.01)
Growth rate of real export value 0.032* 0.029* 0.032* 0.029*
(0.02) (0.02) (0.02) (0.02)
Growth rate of balancing transfer 0.037** 0.034** 0.039*** 0.036**
(0.01) (0.01) (0.01) (0.01)
Growth rate of labour in private sector 0.057* 0.066** 0.062** 0.073**
(0.03) (0.03) (0.03) (0.03)
Year effects yes yes yes yes
Number of observation 231 220 239 226
Number of group 48 43 48 43
Adjusted R-square 0.2796 0.2892 0.2820 0.2820
F 5.943 8.668 7.814 10.152
Notes: * , ** , and *** indicate statistical significance at 10%, 5% and 1% levels. Robust standard
errors are in brackets. FD1 is ratio of own-source revenue and total expenditure.
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 13
14. Real provincial per-capita growth regressions (FD2 and FD3)
Fixed Effect Model
Independent variables 5 6
FD2 0.1970**
(0.079)
FD3 0.1356**
(0.054)
Inflation CPI -0.5497*** -0.5731***
(0.138) (0.149)
Population growth rate -0.6492*** -0.6453***
(0.151) (0.151)
Growth rate of private sector labour force 0.0823*** 0.0777***
(0.028) (0.027)
Growth rate of real export value 0.0257* 0.0261*
(0.015) (0.015)
Growth rate of balancing transfer 0.0346*** 0.0351***
(0.011) (0.012)
constant 0.0939*** 0.0761***
(0.018) (0.022)
Year effects yes yes
Number of observation 226 226
Number of group 43 43
Adjusted R-square 0.3284 0.3291
F 9.974 9.888
Notes: * , ** , and *** indicate statistical significance at 10%, 5% and 1% levels.
Robust standard errors are in brackets. FD2 is ratio of shared revenue and total
expenditure.
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 14
15. Real provincial per-capita growth regressions (Composite FD indicator)
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 15
Fixed Effect Model
Independent variables Model 1 Model 2 Model 3
FDI1 2.1970**
(1.014)
FDI2 1.6384***
(0.568)
FDI3 1.4329***
(0.462)
Inflation CPI -0.5113*** -0.5091*** -0.5081***
(0.139) (0.131) (0.133)
Population growth rate -0.6078*** -0.6309*** -0.6263***
(0.146) (0.142) (0.141)
Growth rate of labour in private sector 0.0696** 0.0755** 0.0727**
(0.030) (0.028) (0.028)
Growth rate of real export value 0.0268* 0.0255* 0.0255*
(0.015) (0.014) (0.014)
Growth rate of balancing transfer 0.0343*** 0.0340*** 0.0338***
(0.012) (0.011) (0.011)
Year effects yes yes yes
Number of observation 226 226 226
Number of group 43 43 43
Adjusted R-square 0.3252 0.3352 0.3383
F 9.623 10.401 10.411
Notes: * , ** , and *** indicate statistical significance at 10%, 5% and 1%
levels, respectively. Robust standard errors are in brackets.
16. Generalised Method of Moments Models
Dependent variable: Growth rate of real GDP per capita
GMM models
Independent variables Model 1 Model 2 Model 3
Lag of growth rate of real per capita GDP -0.2784 0.1651 0.1716
(0.217) (0.124) (0.115)
FD1 0.6822 0.3590*** 0.3636***
(0.523) (0.131) (0.128)
Lag of FD1 1.5385 -0.0994 -0.1006
(1.033) (0.115) (0.117)
Inflation (CPI) -0.6037*** -0.2757** -0.2801**
(0.197) (0.116) (0.115)
Population growth rate -0.6627** -0.9883*** -0.9943***
(0.282) (0.310) (0.315)
Growth rate of private sector labour force -0.0146 0.0922 0.0926
(0.093) (0.060) (0.059)
Growth rate of real export value 0.0127 0.0028 -
(0.018) (0.013)
Growth rate of industrial added value 0.0707*** 0.0927*** 0.0948***
(0.026) (0.022) (0.020)
Growth rate of balancing transfer 0.0098 - -
(0.017)
Year effects yes yes yes
N 149 186 186
N- group 42 50 50
Note: *, **, and *** indicate statistical significance at 10%, 5% and 1% levels, respectively.
Robust standard errors are in brackets. FD1 is the ratio of own-source revenue and total
expenditure.
Fiscal decentralisation and economic growth - Tai D. Nguyen 11/18/2014 16
17. Conclusion
• The current paper empirically examines the effect of fiscal
decentralisation in Vietnam using a fixed effect model on a
provincial panel dataset for the period 2004-2010.
• By using a range of alternative measures of fiscal decentralisation,
the paper shows that fiscal decentralisation has a significant and
positive effect on provincial economic growth in Vietnam.
• The results are further confirmed by GMM models to address the
endogeneity concerns.
• In spite of the possible adverse consequences of decentralisation
(Bardhan, 2002), the positive effect of fiscal decentralisation on
economic growth, on average, has so far outweighed any potential
adverse effects in Vietnam.
• Policy implications: With the evidence of its growth enhancing effect,
reforms in fiscal decentralisation should be further pursued and
strengthened in Vietnam.
EBES 13, Istanbul, Turkey 11/18/2014 17
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