Work

Politics of local fiscal discipline with vertical fiscal imbalance

Year: 2024

Type: article

Abstract: We examine the political conditions mediating the effect of vertical fiscal imbalance (VFI) on local government fiscal discipline in Ghana. Based on a panel dataset of 216 local governments in Ghana over the period 1994–2018, we adopt both a static and dynamic approach, in addition to a regression discontinuity design. From the results, while alignment may give “free pass,” local governments could leverage same for effective tax efforts. Further, the benefits of lower political competition may reduce where local governments place reliance on central government grants. There is consistent evidence of a negative effect of VFI on fiscal discipline.

Source: Economics and Politics

DOI: 10.1111/ecpo.12323

Authors: Samuel K. Obeng, Layal Aazam

Institution: University of Warwick

Language: English

Topic: Local Government Finance and Decentralization

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $3,090