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 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.