FISCAL DECENTRALISATION AND SPATIAL EXTERNALITIES IN VIETNAM PROVINCIAL ECONOMIC GROWTH

This paper aims to investigate the impacts of fiscal decentralisation on the provincial economic development in 62 Vietnamese provinces from 2011-2018. We estimate a Spatial Durbin Model (SDM) based on a growth model with spatial externalities. The focus of the paper is on the spatial spillover effe...

Full description

Saved in:
Bibliographic Details
Published in:Journal of economic development 2021, 46(4), 184, pp.31-64
Main Authors: Tung, Bui Duy, Nguyen, Canh Phuc, Su, Dinh Thanh
Format: Article
Language:English
Subjects:
Accountability
Civil liberties
Competition
Decentralization
Economic development
Economic growth
Externality
Fiscal policy
Growth models
Human capital
Hypotheses
Literature reviews
Political behavior
Political representation
Provinces
Public finance
Regions
경제학
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper aims to investigate the impacts of fiscal decentralisation on the provincial economic development in 62 Vietnamese provinces from 2011-2018. We estimate a Spatial Durbin Model (SDM) based on a growth model with spatial externalities. The focus of the paper is on the spatial spillover effects of fiscal decentralisation on the provincial income levels. The results confirm the existence of spatial interdependency among Vietnamese provinces. The findings indicate that fiscal decentralisation and physical capital not only affects the income level within one province, but also contribute positively to the outputs of nearby provinces. The study does not find significant effects of human capital on provincial income. We also show that these effects vary across five main economic regions of Vietnam. There is also evidence that the total effects are stronger in high institutional quality levels, which points out to the "sand the wheels" effect. Policy implications are also discussed.
ISSN:0254-8372
DOI:10.35866/caujed.2021.44.4.002