Fiscal Decentralization, Public Governance, and Economic Performance: Examination of Two PLS-SEM Models

Louis Chih-hung Liu

《Taiwan Journal of Democracy》 13卷2期 (2017/12) Pp. 55-72

摘要

Fiscal decentralization has become a central theme in the academic field as well as for international aid programs. Current studies of fiscal decentralization center on its economic benefits. However, the possibility that fiscal decentralization facilitates economic performance through enhanced public governance largely is ignored. This essay attempts to examine the possible associations among fiscal decentralization, public governance, and economic performance. Different from traditional statistical techniques such as regression analysis, this research employs a novel analytical approach (i.e., partial least square-structural equation modeling, or PLS-SEM) to explore these associations. We established two PLS-SEM models, the Oates Model and the Superior Goods Model, to test our hypotheses. Our empirical results suggest that the Oates argument and the Superior Goods contentions are both valid in our models. These outcomes also imply that, to reap ultimate economic benefits, fiscal decentralization should be implemented along with proper institutional reforms for better public governance.

關鍵字

Economic performance ； fiscal decentralization ； PLS-SEM ； public governance

參考文獻

Oates, Wallace(1972).Fiscal Federalism.New York:Harcourt Brace Jovanovich.

World Bank, “Governance: What We Are Talking about When We Talk about Subnational Governments” (August 26,2015),http://blogs.worldbank.org/governance/what-are-we-talking-about-when-we-talk-about-subnational-governments(accessed December 25, 2016).

Oates, Wallace(1993).Fiscal Decentralization and Economic Development.National Tax Journal.46(2),237-243.

Oates, Wallace(2005).Toward a Second-Generation Theory of Fiscal Federalism.International Tax and Public Finance.12(4),349-373.

Weingast, Barry(2009).Second Generation Fiscal Federalism: The Implications of Fiscal Incentives.Journal of Urban Economics.65(3),279-293.