Jorge Martinez-vazquez - Academia.edu (original) (raw)
Papers by Jorge Martinez-vazquez
Canadian Tax Journal/Revue fiscale canadienne
Fiscal decentralization has received a great deal of academic research attention in the past thre... more Fiscal decentralization has received a great deal of academic research attention in the past three decades. Much of this work has been directed toward advising countries on how they should structure their intergovernmental fiscal systems to move government decision making closer to local constituencies. Yet even with all this good work, there are many areas where major questions remain. This paper is about where the next round of research might be focused. It begins with an explanation of why attempts to measure fiscal decentralization are unsatisfactory, and ends with a discussion of what might be done about the equally unsatisfactory state of availability of comparative data. The more detailed discussions in this paper cover tax and expenditure assignments, intergovernmental transfers, debt, and the controversy about whether fiscal decentralization has worked.
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Economics & Politics
This study investigates how national levels of corruption are influenced by the interaction of tw... more This study investigates how national levels of corruption are influenced by the interaction of two factors in political decentralization: the presence of local elections and the organizational structure of national parties. Previous studies have focused primarily on the role of fiscal decentralization on corruption and have mostly ignored the institutions of political decentralization. Using new data in a series of expansive models across multiple countries and years, we find that corruption will be lower when local governments are more accountable to and more transparent toward their constituents. This beneficial arrangement is most likely to occur when local elections are combined with nonintegrated political parties, meaning that party institutions themselves are decentralized from national control. Such an institutional arrangement maximizes local accountability by putting the decision to nominate and elect local leaders in the hands of those best in a position to evaluate their...
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RePEc: Research Papers in Economics, 2021
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Edward Elgar Publishing, Nov 1, 2019
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Revista De Economia Mundial, Feb 11, 2014
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Edward Elgar Publishing, Nov 1, 2019
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Revista De Economia Mundial, 2014
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In this paper we find that the institutional set up of proportional representation systems matter... more In this paper we find that the institutional set up of proportional representation systems matters for the welfare properties related with the ideal structure of government providing local public goods. In particular, we study the role of party centralization vs party decentralization in the provision of local public goods. In this paper, we show that the provision of local public goods with inter-regional spillovers by a system of local governments (welfare) dominates the fiscally centralized provision in economies with a proportional representation electoral system and closed party lists. We call this outcome the strong decentralization theorem. For this type of economies, the conventional decentralization theorem (originally identified by Oates 1972) is also satisfied. For economies with a proportional representation and open party lists systems the strong decentralization theorem is satisfied only when party centralization (i.e., the ability of party leaders to nominate candidates in the party’s lists) plays a dominant role in determining the policy platforms of candidates. However, if there is party decentralization (parties lack the ability to influence policy through the nomination process in the party’s list) the strong decentralization theorem is not satisfied. Lastly, the conventional decentralization theorem is satisfied in economies with proportional representation electoral systems and open party lists in both type of party systems: centralized and decentralized.
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In this article, we investigate how differences in the political institutions necessary for imple... more In this article, we investigate how differences in the political institutions necessary for implementing decentralization reform may affect the efficiency and welfare properties of decentralization itself. We incorporate insights from political science and economics into a rigorous and formal extension of the influential “decentralization theorem” first developed by Oates in 1972. In our analysis, we go beyond Oates by producing a strong decentralization theorem that identifies the political conditions under which democratic decentralization dominates centralization even in the presence of interjurisdictional spillovers. More specifically, we find that beneficial outcomes for public service delivery will obtain when democratic decentralization (i.e. the creation of popularly elected sub-national governments) is combined with party centralization (i.e. the power of national party leaders to nominate candidates for sub-national office). We also find that the participation rules of pri...
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Este libro analiza las razones de desempeno mediocre de paises seleccionados de America Latina en... more Este libro analiza las razones de desempeno mediocre de paises seleccionados de America Latina en la movilizacion de ingresos propios subnacionales y explora las opciones de politica para aumentar estos ingresos como de la manera mas eficiente y equitativa posible. Siete estudios de caso - Argentina, Bolivia, Brasil, Colombia, Mexico, Peru y Venezuela - abarcan una amplia gama de caracteristicas, incluyendo los paises federales y unitarios, diferentes tamanos geograficos, niveles de desarrollo economico, y grados de descentralizacion de los ingresos. En este libro, los gobiernos subnacionales incluyen tanto los niveles intermedios y locales de gobierno, que se distinguen en los estudios de caso. En conjunto, los estudios de casos proporcionan una imagen razonablemente representativa de los desafios que enfrentan en toda America Latina en la movilizacion de ingresos propios subnacionales de una manera que apoye el crecimiento equitativo.
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Journal of Theoretical Politics, 2020
We explore how party structures can condition the benefits of decentralization in modern democrac... more We explore how party structures can condition the benefits of decentralization in modern democracies. In particular, we study the interaction of two political institutions: democratic (de)centralization (whether a country has fiscally autonomous and elected local governments) and party (non)integration (whether power over local party leaders flows upwards through party institutions, which we model using control over candidate selection). We incorporate these institutions into our strong decentralization theorem, which expands on Oates (1972) to examine when the decentralized provision of public services will dominate centralized provision even in the presence of inter-jurisdictional spillovers. Our findings suggest that, when externalities are present, democratic decentralization will be beneficial only when parties are integrated. In countries with non-integrated parties, we find that the participation rules of primaries have implications for the expected gains from democratic dece...
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International Perspectives, 2006
SIX Fiscal Federalism and Economic Reform in China Roy Bahl and Jorge Martinez-Vazquez1 I. INTROD... more SIX Fiscal Federalism and Economic Reform in China Roy Bahl and Jorge Martinez-Vazquez1 I. INTRODUCTION Because of history, size, and economic potential China is a force to reckon with. It is a nation of 9.6 million square kilometers populated by 1.26 billion people with a ...
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RePEc: Research Papers in Economics, Jul 1, 2002
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Applied Economic Analysis, 2021
Purpose The purpose of this paper is to quantify to what extent the housing bubble in the early-t... more Purpose The purpose of this paper is to quantify to what extent the housing bubble in the early-to-mid 2000s in Spain exacerbated land planning corruption among Spain’s largest municipalities. Design/methodology/approach The authors exploit plausibly exogenous variation in housing prices induced by changes in local mortgage market conditions; namely, the rapid expansion of savings banks (Cajas de Ahorros). Accounting for electoral competition in the 2003–2007 and 2007–2009 electoral cycles among Spanish municipalities larger than 25,000 inhabitants, the authors estimate a positive relationship between housing prices and land planning corruption in municipalities with variation in savings bank establishments using instrumental variables techniques. Findings A 1% increase in housing prices leads to a 3.9% points increase in the probability of land planning corruption. Moreover, absolute majority governments (not needing other parties’ support) are more susceptible to the incidence of ...
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The Journal of Economic Inequality
The passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 19... more The passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996 devolved responsibility for the design of welfare programs from the federal to state governments in the U.S. The strategies implemented to achieve some of the main goals of the reform might have had the effects of reducing the protection received by the most vulnerable households and increasing differences in benefit levels across states. We estimate these effects using Temporary Assistance for Needy Families data covering the two decades after the PRWORA’s enactment. We find that inequality levels across states increased and that a general process of degradation in the adequacy of these cash benefits took place ensuing devolution of welfare reform in the U.S.
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Canadian Tax Journal/Revue fiscale canadienne
Fiscal decentralization has received a great deal of academic research attention in the past thre... more Fiscal decentralization has received a great deal of academic research attention in the past three decades. Much of this work has been directed toward advising countries on how they should structure their intergovernmental fiscal systems to move government decision making closer to local constituencies. Yet even with all this good work, there are many areas where major questions remain. This paper is about where the next round of research might be focused. It begins with an explanation of why attempts to measure fiscal decentralization are unsatisfactory, and ends with a discussion of what might be done about the equally unsatisfactory state of availability of comparative data. The more detailed discussions in this paper cover tax and expenditure assignments, intergovernmental transfers, debt, and the controversy about whether fiscal decentralization has worked.
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Economics & Politics
This study investigates how national levels of corruption are influenced by the interaction of tw... more This study investigates how national levels of corruption are influenced by the interaction of two factors in political decentralization: the presence of local elections and the organizational structure of national parties. Previous studies have focused primarily on the role of fiscal decentralization on corruption and have mostly ignored the institutions of political decentralization. Using new data in a series of expansive models across multiple countries and years, we find that corruption will be lower when local governments are more accountable to and more transparent toward their constituents. This beneficial arrangement is most likely to occur when local elections are combined with nonintegrated political parties, meaning that party institutions themselves are decentralized from national control. Such an institutional arrangement maximizes local accountability by putting the decision to nominate and elect local leaders in the hands of those best in a position to evaluate their...
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RePEc: Research Papers in Economics, 2021
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Edward Elgar Publishing, Nov 1, 2019
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Revista De Economia Mundial, Feb 11, 2014
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Edward Elgar Publishing, Nov 1, 2019
Bookmarks Related papers MentionsView impact
Revista De Economia Mundial, 2014
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In this paper we find that the institutional set up of proportional representation systems matter... more In this paper we find that the institutional set up of proportional representation systems matters for the welfare properties related with the ideal structure of government providing local public goods. In particular, we study the role of party centralization vs party decentralization in the provision of local public goods. In this paper, we show that the provision of local public goods with inter-regional spillovers by a system of local governments (welfare) dominates the fiscally centralized provision in economies with a proportional representation electoral system and closed party lists. We call this outcome the strong decentralization theorem. For this type of economies, the conventional decentralization theorem (originally identified by Oates 1972) is also satisfied. For economies with a proportional representation and open party lists systems the strong decentralization theorem is satisfied only when party centralization (i.e., the ability of party leaders to nominate candidates in the party’s lists) plays a dominant role in determining the policy platforms of candidates. However, if there is party decentralization (parties lack the ability to influence policy through the nomination process in the party’s list) the strong decentralization theorem is not satisfied. Lastly, the conventional decentralization theorem is satisfied in economies with proportional representation electoral systems and open party lists in both type of party systems: centralized and decentralized.
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In this article, we investigate how differences in the political institutions necessary for imple... more In this article, we investigate how differences in the political institutions necessary for implementing decentralization reform may affect the efficiency and welfare properties of decentralization itself. We incorporate insights from political science and economics into a rigorous and formal extension of the influential “decentralization theorem” first developed by Oates in 1972. In our analysis, we go beyond Oates by producing a strong decentralization theorem that identifies the political conditions under which democratic decentralization dominates centralization even in the presence of interjurisdictional spillovers. More specifically, we find that beneficial outcomes for public service delivery will obtain when democratic decentralization (i.e. the creation of popularly elected sub-national governments) is combined with party centralization (i.e. the power of national party leaders to nominate candidates for sub-national office). We also find that the participation rules of pri...
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Este libro analiza las razones de desempeno mediocre de paises seleccionados de America Latina en... more Este libro analiza las razones de desempeno mediocre de paises seleccionados de America Latina en la movilizacion de ingresos propios subnacionales y explora las opciones de politica para aumentar estos ingresos como de la manera mas eficiente y equitativa posible. Siete estudios de caso - Argentina, Bolivia, Brasil, Colombia, Mexico, Peru y Venezuela - abarcan una amplia gama de caracteristicas, incluyendo los paises federales y unitarios, diferentes tamanos geograficos, niveles de desarrollo economico, y grados de descentralizacion de los ingresos. En este libro, los gobiernos subnacionales incluyen tanto los niveles intermedios y locales de gobierno, que se distinguen en los estudios de caso. En conjunto, los estudios de casos proporcionan una imagen razonablemente representativa de los desafios que enfrentan en toda America Latina en la movilizacion de ingresos propios subnacionales de una manera que apoye el crecimiento equitativo.
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Journal of Theoretical Politics, 2020
We explore how party structures can condition the benefits of decentralization in modern democrac... more We explore how party structures can condition the benefits of decentralization in modern democracies. In particular, we study the interaction of two political institutions: democratic (de)centralization (whether a country has fiscally autonomous and elected local governments) and party (non)integration (whether power over local party leaders flows upwards through party institutions, which we model using control over candidate selection). We incorporate these institutions into our strong decentralization theorem, which expands on Oates (1972) to examine when the decentralized provision of public services will dominate centralized provision even in the presence of inter-jurisdictional spillovers. Our findings suggest that, when externalities are present, democratic decentralization will be beneficial only when parties are integrated. In countries with non-integrated parties, we find that the participation rules of primaries have implications for the expected gains from democratic dece...
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International Perspectives, 2006
SIX Fiscal Federalism and Economic Reform in China Roy Bahl and Jorge Martinez-Vazquez1 I. INTROD... more SIX Fiscal Federalism and Economic Reform in China Roy Bahl and Jorge Martinez-Vazquez1 I. INTRODUCTION Because of history, size, and economic potential China is a force to reckon with. It is a nation of 9.6 million square kilometers populated by 1.26 billion people with a ...
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RePEc: Research Papers in Economics, Jul 1, 2002
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Applied Economic Analysis, 2021
Purpose The purpose of this paper is to quantify to what extent the housing bubble in the early-t... more Purpose The purpose of this paper is to quantify to what extent the housing bubble in the early-to-mid 2000s in Spain exacerbated land planning corruption among Spain’s largest municipalities. Design/methodology/approach The authors exploit plausibly exogenous variation in housing prices induced by changes in local mortgage market conditions; namely, the rapid expansion of savings banks (Cajas de Ahorros). Accounting for electoral competition in the 2003–2007 and 2007–2009 electoral cycles among Spanish municipalities larger than 25,000 inhabitants, the authors estimate a positive relationship between housing prices and land planning corruption in municipalities with variation in savings bank establishments using instrumental variables techniques. Findings A 1% increase in housing prices leads to a 3.9% points increase in the probability of land planning corruption. Moreover, absolute majority governments (not needing other parties’ support) are more susceptible to the incidence of ...
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The Journal of Economic Inequality
The passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 19... more The passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996 devolved responsibility for the design of welfare programs from the federal to state governments in the U.S. The strategies implemented to achieve some of the main goals of the reform might have had the effects of reducing the protection received by the most vulnerable households and increasing differences in benefit levels across states. We estimate these effects using Temporary Assistance for Needy Families data covering the two decades after the PRWORA’s enactment. We find that inequality levels across states increased and that a general process of degradation in the adequacy of these cash benefits took place ensuing devolution of welfare reform in the U.S.
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Tax policy is among the most common and relevant instruments in the toolkit of policy-makers when... more Tax policy is among the most common and relevant instruments in the toolkit of policy-makers when thinking about promoting growth, yet there is not compelling evidence regarding its effect in Latin American countries. Using a variety of approaches, we estimate the effects on growth of the most important taxes for the region, namely personal income tax, corporate income tax, general taxes on goods and services, including value added and other sales taxes, and revenues from natural resource. We evaluate the effect of these tax instruments on growth for Argentina, Brazil, Mexico, and Chile using vector autoregressive techniques, and for close to the entire region and a worldwide sample of developing and developed countries using panel data estimation. We find that, for the most part, personal income tax does not have the expected negative effect on economic growth in Latin America, which is largely explained by the small collections in the region. For corporate income tax, our results suggest reducing tax evasion and greater reliance on collection may boost economic growth in the region as a whole and especially for natural resource exporting countries. But, we also find small negative effects of corporate income tax on growth for individual countries, specifically Argentina, Mexico, and Chile. Finally, our results suggest that greater reliance on consumption taxes has significant positive effects on growth in Latin American in general, although we again find slight negative effects in some of the selected countries. On the other hand, natural resource revenues do not seem to contribute to growth.
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This paper contributes to the existing literature on the determinants of fiscal decentralization ... more This paper contributes to the existing literature on the determinants of fiscal decentralization by motivating theoretically and exploring in depth the empirical relevance that geography has as determinant of fiscal decentralization. The relationship between decentralization and geography is based on the logic that more geographically diverse countries show greater heterogeneity among their citizens, including their preferences and needs for public goods and services provision. Communications and physical distance are also a very important issue and play a key role on the effect of geography over time. The theoretical model builds on the work by Arzaghi and Henderson (2002) and Panizza (1999). For the empirical estimation we use a panel data set for approximately 91 countries for the period 1960-2005. Physical geography is measured along several dimensions including elevation, land area, and climate. We construct a geographical fragmentation index and test its effect on fiscal decentralization. In addition, we interact the geographical fragmentation index with time variant infrastructure variables, in order to test the effect that infrastructure and communications have on the relationship between geography and fiscal decentralization. For robustness, we construct Gini coefficients for in-country elevation and climate. We find a positive and strong correlation between geographical factors and fiscal decentralization. We also find that while the development of infrastructure (in transportation, communications, etc.) tends to reduce the effect of geography on decentralization, this effect is rather small and mostly statistically insignificant, meaning that the impact of geography survives over time. The additional value added of this strategy is that geography and its interaction with infrastructure development may be used as an instrument for decentralization in future econometric estimations, where decentralization is used as an explanatory variable but it may be suspected to be endogenous to the economic process being studied (economic growth, political instability, macroeconomic stability, income distribution, etc.)
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This paper analyzes the problem of sub-national revenue mobilization in Peru and proposes several... more This paper analyzes the problem of sub-national revenue mobilization in Peru and proposes several policy reforms to improve collection performance while maintaining a sound revenue structure. In particular, the paper analyzes the current revenues of regional and municipal governments and identifies the main priorities for reform. Among the most important problems are the acute inequalities and inefficiencies associated with revenue sharing from extractive industries. These revenues represent a significant share of sub-national budgets and currently they are distributed without consideration of the relative expenditure needs or fiscal capacity of sub-national units. In order to address this problem, the paper proposes the incorporation of a measure of fiscal capacity into the formula of the FONCOMUN, the municipal equalization transfer program. Other reforms explored include the reassignment of revenue sources between municipal provincial and district governments and the assignment of new taxes to regional governments.
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Decentralizing Revenue in Latin America: Why and How, 2015
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