Fiscal Decentralization in Kazakhstan and the impact on economic growth

Abstract

This article proposes a method for assessing the effects of fiscal
decentralization on economic development. The relationship between the proper
level of fiscal decentralization and economic growth for 17 regions and cities of
republican significance in Kazakhstan from 2010 to 2020 was evaluated using
panel data. Panel cointegration and dynamic ordinary least squares (DOLS)
results suggest that fiscal decentralization has a negative and significant impact
on gross regional product. The study found that both income and expenditure
decentralization have a negative impact on economic growth, and that further
fiscal decentralization currently has a negative impact on gross regional product
(GRP) growth. Given the premise that fiscal decentralization usually promotes
local economic progress, this consistently significant and powerful result of our
empirical analysis is surprising.