The dilemma of fiscal federalism: grants and fiscal performance around the world

This paper uses cross-national data to examine the effects of federal fiscal and political institutions on the fiscal performance of subnational governments. Balanced budgets among subnational governments are found when either (1) the center imposes strong borrowing restrictions or (2) subnational g...

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Detalles Bibliográficos
Autor principal: Rodden, Jonathan
Formato: Objeto de conferencia
Lenguaje:Inglés
Publicado: 2001
Materias:
Ciencias Económicas
federalismo
política fiscal
Acceso en línea:http://sedici.unlp.edu.ar/handle/10915/3662
http://www.depeco.econo.unlp.edu.ar/siff/2001/trabajo10.pdf
Aporte de:
SEDICI (UNLP) de Universidad Nacional de La Plata
id I19-R120-10915-3662
record_format dspace
institution Universidad Nacional de La Plata
institution_str I-19
repository_str R-120
collection SEDICI (UNLP)
language Inglés
topic Ciencias Económicas
federalismo
política fiscal
spellingShingle Ciencias Económicas
federalismo
política fiscal
Rodden, Jonathan
The dilemma of fiscal federalism: grants and fiscal performance around the world
topic_facet Ciencias Económicas
federalismo
política fiscal
description This paper uses cross-national data to examine the effects of federal fiscal and political institutions on the fiscal performance of subnational governments. Balanced budgets among subnational governments are found when either (1) the center imposes strong borrowing restrictions or (2) subnational governments have both wide-ranging taxing and borrowing autonomy. Large and persistent aggregate deficits occur when subnational governments are simultaneously dependent on general-purpose intergovernmental transfers and free to borrow-a combination found most frequently among constituent units in federations. Time-series cross-section analysis reveals that as countries increase their reliance on transfers over time, subnational and overall fiscal performance decline, especially when subnational governments have easy access to credit. These findings illuminate a key dilemma of fiscal federalism and a more precise notion of its dangers: When constitutionally constrained or politically fragmented central governments take on heavy co-financing obligations, they cannot credibly commit to ignore the fiscal problems of lower-level governments.
format Objeto de conferencia
Objeto de conferencia
author Rodden, Jonathan
author_facet Rodden, Jonathan
author_sort Rodden, Jonathan
title The dilemma of fiscal federalism: grants and fiscal performance around the world
title_short The dilemma of fiscal federalism: grants and fiscal performance around the world
title_full The dilemma of fiscal federalism: grants and fiscal performance around the world
title_fullStr The dilemma of fiscal federalism: grants and fiscal performance around the world
title_full_unstemmed The dilemma of fiscal federalism: grants and fiscal performance around the world
title_sort dilemma of fiscal federalism: grants and fiscal performance around the world
publishDate 2001
url http://sedici.unlp.edu.ar/handle/10915/3662
http://www.depeco.econo.unlp.edu.ar/siff/2001/trabajo10.pdf
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