Decentralisation and Quality of Fiscal Management: Empirical Evidence from Pakistan
Journal Title: Journal of Development Policy, Research & Practice (JoDPRP) - Year 2022, Vol 6, Issue 01
Abstract
Effective use of public resources is crucial for developing countries facing persistent deficits. Fiscal decentralisation is believed to enhance government efficiency over resource use. Therefore, the paper intends to examine the association between Pakistan’s Fiscal Decentralisation (FD) and Fiscal Management from 1988 to 2020. The authors develop a Composite Decentralisation Index (CDI) that captures the effect of both Expenditure Decentralisation (ED) and Revenue Decentralisation (RD) processes. After confirmation of stationarity through augmented Dickey-Fuller (ADF) and Philip-Peran (PP) unit roots tests, the study employs the Johansen cointegration method to draw longrun estimates. The study’s findings reveal that composite decentralisation reduces public deficit significantly - lower corruption, weaker underground economy, and smaller government size help reduce the fiscal deficit. The Error Correction Term (ECM) is also negative and significant at 1%, which confirms the speed of convergence towards longrun equilibrium in case of any shock or dis equilibrium in the short run. These study findings may help policymakers and legislatures draft effective long-term fiscal management policies.
Authors and Affiliations
Asif Razzaq, Rabia Nazir, Sundus Shaheen
Keywords
Related Articles
- EP ID EP715613
- DOI -
- Views 23
- Downloads 0
Cyber Security Imperatives and Pakistan’s Readiness: A Brief Overview
With increasing use of the Internet and its free for all availability, the cyber space is expanding making it easier for hackers to target infrastructure and services. The next war between adversaries will be a cyber war...
Youth Development in Pakistan: A Provincial Analysis
The paper studies youth development in Pakistan from a provincial lens and examines policies and relevant measures of each province in this regard. The Sustainable Development Goals (SDGs) related to education are also e...
Deconstructing Disruptive Industry Technological Models: Concord between Smoking and Vaping
Domination of the tobacco industry’s innovative business models has forced many countries to develop defensive tobacco control strategies. Pakistan has been routinely adopting new legislation for this industry for the pa...
Repackaging News Content: Exploring Routines of Pakistan’s Wire Services
This study was conducted to explore editorial processes of wire services in Pakistan, specifically looking at repackaging of content to reproduce news – a phenomenon known as Churnalism. Semi-structured interviews were c...
Decentralisation and Quality of Fiscal Management: Empirical Evidence from Pakistan
Effective use of public resources is crucial for developing countries facing persistent deficits. Fiscal decentralisation is believed to enhance government efficiency over resource use. Therefore, the paper intends to ex...