Fiscal Decentralisation and Ethnic Politics in Macedonia
Competing ethno-centered strategies over the local fiscal resources can seriously undermine political and economic stability of ethnically diverse societies. This study investigates the causal link between ethnic diversity and local government finances by focusing on the case of Macedonia. In particular: whether fiscal decentralization is used as a part of broader strategy for prevention and mitigation of inter-ethnic conflicts. The main argument is that low level of political culture and inter-ethnic tensions are frustrating the development of the government policy along a course of decentralization. The study confronts two emerging scenarios regarding decentralization and inter-ethnic relations. The first scenario puts the economic development at the forefront for country’s stability and treats decentralisation as a driving force to achieve this goal. Ethnic problems are expected to be solved along this path as rising economic stability reduces the inter-ethnic tensions. In the second scenario, the inter-ethnic stability is the main pillar of the country’s stability, which is expected to be accomplished through decentralisation. The paper analyses and synthesizes pros and cons of two scenarios from administrative, legal, political and economic perspectives.
Aisling, L. (2015) Political Decentralization and the Strengthening of Consensual, Participatory Local Democracy in the Republic of Macedonia, Democratization, 22(1), pp. 1–22, doi:10.1080/13510347.2013.834331.
Alesina, A. & La Ferrara, E. (2005) Ethnic Diversity and Economic Performance, Journal of Economic Literature, 43(3), pp. 762–800, doi: 10.1257/002205105774431243.
Arzaghi, M. & Henderson, J. V. (2005) Why Countries Are Fiscally Decentralizing, Journal of Public Economics, 89(7), pp. 1157–1189, doi: 10.1016/j.jpubeco.2003.10.009.
Beramendi, P., & Maíz Suárez, R. (2004) Spain: Unfulfilled Federalism (1978-1996), In: Bermeo, N. G. &. Amoretti, U. M., (eds.) Federalism and Territorial Cleavages (Baltimore: Johns Hopkins University Press), pp. 123-155.
Bird, M. R. & Vaillancourt, F. (2001) Reconciling Diversity with Equality: The Role of Intergovernmental Fiscal Arrangements in Maintaining an Effective State in Canada, International Tax Program Papers 0406, International Tax Program (Toronto: Institute for International Business, Joseph L. Rotman School of Management, University of Toronto).
Bird, R. M., Vaillancourt, F. & Édison, R.-C. (2010) Is Decentralization “Glue” or “Solvent” for National Unity?, International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1003 (Atlanta, GA: International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University).
Bodman, P & Hodge, A. (2010) What Drives Fiscal Decentralisation? Further Assessing the Role of Income, Fiscal Studies, 31(3): pp. 373–404, doi:10.1111/j.1475-5890.2010.00119.x.
Brancati, D. (2006) Decentralization: Fueling the Fire or Dampening the Flames of Ethnic Conflict and Secessionism?, International Organization, 60 (3), pp. 651–685, doi:10.1017/S002081830606019X.
Brinkerhoff, D. W. (2005) Rebuilding Governance in Failed States and Post-Conflict Societies: Core Concepts and Cross-Cutting Themes, Public Administration and Development, 25(1), 3–14, doi: 10.1002/pad.352.
Collier, P. (2001) Implications of Ethnic Diversity, Economic Policy, 16(32), pp. 127–166, doi: 10.1111/1468-0327.00072.
Curtice, J. (2006) A Stronger or Weaker Union? Public Reactions to Asymmetric Devolution in the United Kingdom, Publius: The Journal of Federalism, 36(1), 95–113, doi: doi:10.1093/publius/pjj006.
Duncan, C. R. (2007) Mixed Outcomes: The Impact of Regional Autonomy and Decentralization on Indigenous Ethnic Minorities in Indonesia, Development and Change, 38(4), pp. 711–733, doi:10.1111/j.1467-7660.2007.00430.x.
Eaton, K. (2006) The Downside of Decentralization: Armed Clientelism in Colombia, Security Studies, 15(4), 533–562, doi: 10.1080/09636410601188463.
Elkins, Z. & Sides, J. (2007) Can Institutions Build Unity in Multiethnic States?, American Political Science Review, 101(4), pp. 693–708, doi: 10.1017/S0003055407070505.
Epstein, D., Leventoğlu, B. & O’Halloran, S. (2012) Minorities and Democratization, Economics & Politics, 24(3), 259–278, doi: 10.1111/j.1468-0343.2012.00403.x.
Fearon, J. D. & Laitin, D. D: (2003) Ethnicity, Insurgency, and Civil War, American Political Science Review, 97(1), pp. 75–90, doi: 10.1017/S0003055403000534.
Feruglio, N., Martinez-Vazquez, J. & Timofeev, A. (2008) An Assessment of Fiscal Decentralization in Macedonia, International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0814 (Atlanta, GA: International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University).
Hardgrave, R. L. (1993) India: The Dilemmas of Diversity, Journal of Democracy, 4(4), pp. 54–68, doi: 10.1353/jod.1993.0052.
Horowitz, D. L. (1991) A Democratic South Africa? Constitutional Engineering in a Divided Society (Berkeley: University of California Press), doi: 10.2307/485464.
Jenne, E. K., Saideman, S. M. & Lowe, W. (2007) Separatism as a Bargaining Posture: The Role of Leverage in Minority Radicalization, Journal of Peace Research, 44(5), pp. 539–558, doi:10.1177/0022343307080853.
Kymlicka, W. (1998) Is Federalism a Viable Alternative to Secession?, In: Lehning, P. B. (ed.) Theories of Secession (London and New York: Routledge).
Lijphart, A. (1977) Democracy in Plural Societies: A Comparative Exploration (New Haven and London: Yale University Press).
Lustick, I. S., Miodownik, D. & Eidelson, R. J. (2004) Secessionism in Multicultural States: Does Sharing Power Prevent or Encourage It?, American Political Science Review, 98(02), pp. 209–229, doi: 10.1017/S0003055404001108.
Maksimovska, A. & Stojkov, A. (2013) The Future of Fiscal Decentralization in Southeastern Europe: What is on the Horizon?, Lex Localis – Journal of Local Self-Government, 11(3), pp. 325-343.
Martinez-Vazquez, J. & Timofeev, A. (2008) Fiscal Perspective of State Rescaling, International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0806 (Atlanta, GA: International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University).
Martinez-Vazquez, J. (2010) Decentralization Measures Revisited, Public Finance & Management, 10(1), pp. 13–47.
Ministry of Finance (2014) Fiscal Strategy of the Republic of Macedonia 2015-17 (Skopje: Government of Macedonia).
Montalvo, J. G. & Reynal-Querol, M. (2005) Ethnic Polarization, Potential Conflict, and Civil Wars, American Economic Review, 95(3), pp. 796–816, doi: 10.1257/0002828054201468.
Oates, W. E. (1972) Fiscal Federalism (New York: Harcourt Brace Jovanovich).
Panizza, U. (1999) On the Determinants of Fiscal Centralization: Theory and Evidence, Journal of Public Economics 74 (1), pp. 97–139, doi: 10.1016/S0047-2727(99)00020-1.
Saideman, S. M., Lanoue, D., Campenni, M., & Stanton, S. (2002) Democratization, Political Institutions, and Ethnic Conflict: A Pooled, Cross-Sectional Time Series Analysis from 1985-1998, Comparative Political Studies, 35(1), pp. 103-129.
Siegle, J. & O’Mahony, P. (2007) Assessing the Merits of Decentralization as a Conflict Mitigation Strategy (University Park, PA: Pennsylvania State University), available at: http://dai.com/news-publications/publications/assessing-merits-decentralization-conflict-mitigation-strategy (April 2, 2014).
Sorens, J. (2008) Regionalists Against Secession: The Political Economy of Territory in Advanced Democracies, Nationalism and Ethnic Politics, 14(3), pp. 325-360, doi: 10.1080/13537110802289670.
Sorens, J. (2011) The Institutions of Fiscal Federalism, Publius: The Journal of Federalism, 41(2), pp. 207-231, doi: 10.1093/publius/pjq016.
Tanzi, V. (2000) On Fiscal Federalism: Issues to Worry About (Washington D.C.: The World Bank).
It is a condition that the authors assign copyright or license the publication rights in their articles, including abstracts, to Institute for Local Self-Government Maribor. This enables us to ensure full copyright protection and to disseminate the article, and of course Journal, to the widest possible readership in print and electronic formats as appropriate. Authors retain many rights under the Institutes' right policies, which can be found at journal.lex-localis.press. Authors are themselves responsible for obtaining permission to reproduce copyright material from other sources.