2015年-世界发展银行全球_Making_the_Whole_Greater_than_the_Sum_the_Parts___A_Review_of_Fiscal_Decentralization_in_Vietnam_216页_5mb

Summary of "Making The Whole Greater Than The Sum Of The Parts: A Review of Fiscal Decentralization in Vietnam"

Core Content

This report reviews the fiscal decentralization policies in Vietnam and their impact on the country's development goals, particularly economic growth and poverty reduction. It evaluates the effectiveness of these policies across five key pillars: expenditure decentralization and accountability, expenditure performance of local authorities, local revenue arrangements, intergovernmental fiscal transfers, and local borrowing.

The study is based on an analysis of available data, consultations with central and local authorities, and a review of relevant laws and regulations. It aims to inform future reforms of central-local fiscal relations by suggesting improvements to the legal and institutional frameworks governing fiscal decentralization.

Main Points

1. Fiscal Decentralization Overview

• Local authorities in Vietnam are responsible for over half of total government spending.
• Total government spending is approximately 30% of GDP, with local spending accounting for about 17%.
• Fiscal decentralization has played a key role in enabling the government to achieve development objectives, especially in poverty reduction and service delivery in poorer regions.

2. Expenditure Decentralization and Accountability

• Local authorities have increasingly taken on spending responsibilities, especially in sectors like education and health.
• There is a trend of decentralization within provinces, with districts bearing a significant share of recurrent spending.
• In 2011, over half of local recurrent spending was managed by districts, particularly in education and health.
• The report highlights the need for clearer assignment of spending responsibilities and stronger accountability mechanisms to align local spending with national priorities.

3. Expenditure Performance of Local Authorities

• There is considerable variation in spending efficiency across provinces.
• Some inefficiencies are due to factors beyond local control, such as population density and geographic location.
• The report emphasizes the importance of improving budget management and accountability to enhance the effectiveness of local spending.
• Public sector performance (PSP) and public sector efficiency (PSE) indicators show mixed results, indicating that not all provinces are performing equally.

4. Local Revenue Arrangements

• Local revenue sources have expanded, and the current policies do not appear to negatively impact revenue collection.
• Revenue and fiscal transfers are relatively equitable across provinces.
• However, local authorities have limited autonomy in revenue policy and administration, which can hinder effective resource use.
• The report suggests that increasing revenue autonomy for selected provinces could improve service delivery and meet investment needs more effectively.

5. Intergovernmental Fiscal Transfers

• Fiscal transfers from the central government to local authorities help address fiscal imbalances and support development in poorer regions.
• The report notes that transfers are generally predictable and cover a significant portion of local spending needs.
• There is a need for more targeted and transparent transfer mechanisms to ensure equitable distribution and better alignment with local development priorities.

6. Local Borrowing

• Local authorities have borrowed to meet investment needs, particularly in urban areas.
• The report highlights the importance of prudent debt management and the need for institutional reforms to ensure fiscal sustainability.
• Local debt is primarily composed of loans from development banks and financial institutions.
• The study suggests that increasing local borrowing capacity, within limits, can complement fiscal transfers and enhance investment in growth-enhancing projects.

Key Findings

• Fiscal decentralization has been effective in shifting resources to poorer regions, where development needs and service delivery costs are higher.
• While local spending has grown, there is still a need for greater transparency and coordination in intergovernmental fiscal relations to prevent fragmentation and unequal development.
• The State Budget Law (SBL 2002) provides a solid framework for fiscal decentralization, but its implementation has led to ambiguities in the assignment of responsibilities.
• The report recommends revising the SBL 2002 and adopting the 2016-2020 Stability Period regulations to improve clarity and accountability in fiscal relations.

Recommendations

• Clarify spending responsibilities between central and local authorities to reduce ambiguity and enhance accountability.
• Improve budget management and transparency to ensure effective and efficient use of public resources.
• Enhance revenue autonomy for selected provinces to better meet local investment needs.
• Strengthen fiscal transfers to be more targeted and equitable in distribution.
• Promote local borrowing within prudent limits to support development and investment.
• Ensure better coordination between different levels of government to avoid fragmentation and support inclusive development.

Conclusion

Fiscal decentralization in Vietnam has contributed to the country's success in economic growth and poverty reduction. However, to further enhance its impact, reforms are needed to improve the clarity of responsibilities, strengthen accountability, and ensure that local authorities have the necessary resources and autonomy to deliver public services effectively. By making the whole greater than the sum of its parts, Vietnam can achieve more equitable and sustainable development across all regions.