public sector decentralization; subnational government autonomy; Leontief model
Description/Abstract
Local budgeting in transition countries is an important process because it can reveal the extent to which fiscal decentralization has occurred. Because central planning regimes were highly centralized, adopting a market/democratic approach requires a devolution of power from the central government to regions and municipalities. A Leontief model is presented as a simple theoretical approach to local budgeting. Local revenues are considered as financial inputs and local expenditures as financial outputs. A method of measuring the degree of local autonomy as a part of the budgeting process is a part of this model.