Fiscal Decentralisation and Local Government Financing in Montenegro from 2002 to 2015
DOI:
https://doi.org/10.4335/14.3.431-450(2016)Keywords:
fiscal decentralisation, local government financing, Montenegro, economic crisis, macroeconomic instability, local economic developmentAbstract
This article examines the fiscal decentralisation process and local government financing in Montenegro from 2002 to 2015 by focusing on the key legislative changes that occurred during the period under observation, as well as on the fiscal impact these changes and the economic crisis have had on municipal budgets. The analysis identifies two distinct phases of municipal financing in Montenegro. In the first phase (2003-2008), the Republic adopted legislation that strengthened the role and fiscal autonomy of local governments. During the second phase (2008-2015), several of the national government’s centralistic policies came into force. Together with the effects of the economic crisis, they deteriorated both local public finance and macroeconomic stability and hindered local economic development.
References
<p align="justify"><span lang="EN-US" style="font-size: 13px; font-family: Cambria">Aldasoro, I. & Seiferling, M. (2014) Vertical fiscal imbalances and the accumulation of government debt, International Monetary Fund Working Paper 14 (Washington D. C.: International Monetary Fund).
Bahl, R. W. & Linn, J. F. (1992) Urban public finance in developing countries (Oxford, UK: Oxford University Press).
Bird, R. M. (1986) On measuring fiscal centralization and fiscal balance in federal states, Government and Policy, 4(4), pp. 384-404.
Bird, R. M. (2010) Subnational taxation in developing countries – a review of the literature, The World Bank Policy Research Working Paper 5450 (Economic Policy and Debt Department).
Cantarero, D. & Gonzalez, P. P. (2009) Fiscal decentralization and economic growth: Evidence from Spanish regions, Public Budgeting & Finance, 29(4), pp. 24-44.
De Mello, L. (2000) Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis, World Development, 28(2), pp. 365–80.
Estache, A. & Sinha, S. (1995) Does decentralization increase public infrastructure expenditure?, World Bank Discussion Paper No. 290 (Washington, DC: World Bank).
Finžgar, M. & Oplotnik, Ž. J. (2013) Comparison of Fiscal Decentralization Systems in EU-27 According to Selected Criteria, Lex Localis – Journal of Local Self-Government, 11 (3), pp. 651-672.
Fisman, R. & Gatti, R. (2002) Decentralization and corruption: Evidence across countries, Journal of Public Economics, 83(3), pp. 325-345.
Governatori, M. & Yim, D. (2012) Fiscal decentralisation and fiscal outcomes, European Economy - Economic Papers No. 468 (European Commission, Directorate-General for Economic and Financial Affairs).
Government of Montenegro, (2002) Administrative Reform Strategy in Montenegro 2002-2009 (Podgorica: Ministry of Justice).
Huther, J. & Shah, A. (1996) A simple measure of good governance and its application to the debate on the appropriate level of fiscal decentralization (Washington, DC: World Bank).
Kim, S. L. (1995) Fiscal decentralization, fiscal structure, and economic performance: Three empirical studies, Ph.D. Thesis (Marzland: University of Maryland at College Park).
Krsmanović, A., Vojinović, I. & Kaluđerović, J. (2006) Proporcionalni porez - akcelerator Ekonomskog Razvoja Crne Gore (Podgorica: ISSP Policy Analysis).
Lewis, B. D. (1998) The impact of public infrastructure on municipal economic development: Empirical results from Kenya, Review of Urban and Regional Development Studies, 10(2), pp. 142-156.
Martin, A., & Lewis, W. A. (1956). Patterns of public revenue and expenditure. The Manchester School, 24 (3), pp. 203-244.
Oates, W. (1999) An Essay on Fiscal Federalism, Journal of Economic Literature, 37(3), pp.1120-1149.
Oates, W. (2002) Fiscal federalism and European Union: Some reflections (Pavia: Universita di Pavia).
Oates, W. (2006) On the Theory and Practice of Fiscal Decentralization, IFIR Working Paper No. 2006-05 (Lexington, Institute for Federalism & Intergovernmental Relations).
Rodden, J., Eskelund, G. & Litvack, J. (2003) Fiscal Decentralization and the Challenge of Hard Budget Constraints (Cambridge: MIT Press).
Smoke, P. (2001) Fiscal decentralization in developing countries – a review of current concepts and practice (Geneva: UN Research Institute for Social Development).
Tanzi, V. (1996) Fiscal federalism and decentralization: A review of some efficiency and macroeconomic aspects. Annual conference on development economics 1995 (Washington DC: The World Bank).
World Bank (2003) Republic of Montenegro: Public expenditure and institutional review (Washington DC: The World Bank, Poverty Reduction and Economic Management Unit).</span></p>
Bahl, R. W. & Linn, J. F. (1992) Urban public finance in developing countries (Oxford, UK: Oxford University Press).
Bird, R. M. (1986) On measuring fiscal centralization and fiscal balance in federal states, Government and Policy, 4(4), pp. 384-404.
Bird, R. M. (2010) Subnational taxation in developing countries – a review of the literature, The World Bank Policy Research Working Paper 5450 (Economic Policy and Debt Department).
Cantarero, D. & Gonzalez, P. P. (2009) Fiscal decentralization and economic growth: Evidence from Spanish regions, Public Budgeting & Finance, 29(4), pp. 24-44.
De Mello, L. (2000) Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis, World Development, 28(2), pp. 365–80.
Estache, A. & Sinha, S. (1995) Does decentralization increase public infrastructure expenditure?, World Bank Discussion Paper No. 290 (Washington, DC: World Bank).
Finžgar, M. & Oplotnik, Ž. J. (2013) Comparison of Fiscal Decentralization Systems in EU-27 According to Selected Criteria, Lex Localis – Journal of Local Self-Government, 11 (3), pp. 651-672.
Fisman, R. & Gatti, R. (2002) Decentralization and corruption: Evidence across countries, Journal of Public Economics, 83(3), pp. 325-345.
Governatori, M. & Yim, D. (2012) Fiscal decentralisation and fiscal outcomes, European Economy - Economic Papers No. 468 (European Commission, Directorate-General for Economic and Financial Affairs).
Government of Montenegro, (2002) Administrative Reform Strategy in Montenegro 2002-2009 (Podgorica: Ministry of Justice).
Huther, J. & Shah, A. (1996) A simple measure of good governance and its application to the debate on the appropriate level of fiscal decentralization (Washington, DC: World Bank).
Kim, S. L. (1995) Fiscal decentralization, fiscal structure, and economic performance: Three empirical studies, Ph.D. Thesis (Marzland: University of Maryland at College Park).
Krsmanović, A., Vojinović, I. & Kaluđerović, J. (2006) Proporcionalni porez - akcelerator Ekonomskog Razvoja Crne Gore (Podgorica: ISSP Policy Analysis).
Lewis, B. D. (1998) The impact of public infrastructure on municipal economic development: Empirical results from Kenya, Review of Urban and Regional Development Studies, 10(2), pp. 142-156.
Martin, A., & Lewis, W. A. (1956). Patterns of public revenue and expenditure. The Manchester School, 24 (3), pp. 203-244.
Oates, W. (1999) An Essay on Fiscal Federalism, Journal of Economic Literature, 37(3), pp.1120-1149.
Oates, W. (2002) Fiscal federalism and European Union: Some reflections (Pavia: Universita di Pavia).
Oates, W. (2006) On the Theory and Practice of Fiscal Decentralization, IFIR Working Paper No. 2006-05 (Lexington, Institute for Federalism & Intergovernmental Relations).
Rodden, J., Eskelund, G. & Litvack, J. (2003) Fiscal Decentralization and the Challenge of Hard Budget Constraints (Cambridge: MIT Press).
Smoke, P. (2001) Fiscal decentralization in developing countries – a review of current concepts and practice (Geneva: UN Research Institute for Social Development).
Tanzi, V. (1996) Fiscal federalism and decentralization: A review of some efficiency and macroeconomic aspects. Annual conference on development economics 1995 (Washington DC: The World Bank).
World Bank (2003) Republic of Montenegro: Public expenditure and institutional review (Washington DC: The World Bank, Poverty Reduction and Economic Management Unit).</span></p>
Published
2016-07-31
Issue
Section
Conference Paper (Annual Conference 2020)
