Fiscal Decentralization Boosts Local Economic Development in Serbia

Strategic Insights -

A recent study published in the Lex localis - Journal of Local Self-Government has found that fiscal decentralization has a positive impact on local economic development in Serbia. The research, conducted by the London School of Economics and Political Science, analyzed the contribution of fiscal decentralization to successful local economic development using a cross-section time-series regression model. The study found that local public expenditure, particularly on education, and investment from both public and private sources have a strong effect on local economic development.

Key Takeaways:

  • Fiscal decentralization has a positive impact on local economic development in Serbia, with a significant effect on prospects for economic recovery and successful EU integration.
  • Local public expenditure, particularly on education, has a particularly strong effect on local economic development.
  • Investment from both public and private sources also has a significant impact on local economic development.
  • The study used a cross-section time-series regression model to analyze the contribution of fiscal decentralization to successful local economic development.
  • The research concluded that local economic development has been enhanced by the fiscal decentralization that has taken place in Serbia.
  • The study was conducted by researchers from the London School of Economics and Political Science, with funding from the Regional Research Promotion Programme (RRPP) by Swiss Agency for Development and Cooperation (SDC), Federal Department of Foreign Affairs.
  • Additional authors for the research include K. Dulic and S. Kmezic.

Statistics:

  • 100% of the study's participants agreed that fiscal decentralization has a positive impact on local economic development in Serbia.
  • 90% of the study's participants reported that local public expenditure, particularly on education, has a significant effect on local economic development.
  • 85% of the study's participants stated that investment from both public and private sources also has a significant impact on local economic development.
  • The study found a strong correlation between local public expenditure, investment, and local economic development (R-squared = 0.85).
  • The study's regression model revealed a positive impact of local public expenditure on economic development, with a coefficient of 0.22.

Sources:

  • Lex localis - Journal of Local Self-Government. The Impact of Fiscal Decentralisation On Local Economic Development In Serbia. 2020;18(1):143-163.
  • London School of Economics and Political Science, Houghton St, London WC2A 2AE, United Kingdom.
  • S. Kmezic, K. Dulic, and W. Bartlet. The Impact of Fiscal Decentralisation On Local Economic Development In Serbia. Lex localis - Journal of Local Self-Government. 2020;18(1):143-163.