Topic
Fiscal federalism
About: Fiscal federalism is a research topic. Over the lifetime, 3646 publications have been published within this topic receiving 88420 citations.
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TL;DR: In this paper, a simple model that unifies most of the results of the literature on fiscal federalism is presented, which describes an economy characterized by two levels of government, one public good, and a private good.
379 citations
TL;DR: In this article, the authors present an overview of the role of the central government in decentralization in developing countries and evaluate the impact of inter-governmental fiscal reform in a planned economy.
Abstract: List of tables List of contributors Preface 1. Fiscal decentralization in developing countries: an overview Richard M. Bird and Francois Vaillancourt 2. China: evaluating the impact of intergovernmental fiscal reform Roy W. Bahl 3. India: intergovernmental fiscal relations in a planned economy M. Govinda Rao 4. Indonesia and Pakistan: fiscal decentralization - an elusive goal? Anwar Shah 5. Morocco and Tunisia: financing local governments - the impact on infrastructure finance Francois Vaillancourt 6. Colombia: the central role of the central government in fiscal decentralization Richard M. Bird and Ariel Fiszbein 7. Argentina: fiscal federalism and decentralization Ernesto Rezk 8. South Africa: an intergovernmental fiscal system in transition Junaid K. Ahmad 9. Bosnia-Herzegovina: fiscal federalism - the Dayton challenge William Fox and Christine Wallich Index.
379 citations
TL;DR: In this paper, the authors show that coordination failures in intergovernmental fiscal relations are likely to result in a deficit bias in decentralized policy-making, particularly in the case of developing countries, which may not meet important requirements for successful decentralization.
377 citations
Book•
01 Jan 1994
TL;DR: In this paper, an overview of the principles and best practices of fiscal federalism should help guide policy debates on restructuring intergovernmental fiscal arrangements, and decentralized decision-making encourages local participation in development.
Abstract: An important dimension of public sector reform in developing and emerging market economies has been the loosening of central control over the private sector and lower level governments. Anwar Shah's overview of the principles and best practices of fiscal federalism should help guide policy debates on restructuring intergovernmental fiscal arrangements. Strong emphasis on central planning impedes innovative responses to local issues by local governments and stymies private sector development. Decentralization should be the rule, Shah contends, unless a strong case can be made for centralizing specific responsibilities. Local public services can be provided more efficiently if expenditures more closely match local needs and preferences. More closely linking benefits to costs also promotes accountability. Increased fiscal autonomy can also help mobilize more revenue from local sources, improving a country's fiscal position. And decentralized decisionmaking encourages local participation in development. Constitutional responsibilities should be stated clearly and precisely. Tax and spending assignments should be determined simultaneously, so revenue means are matched as closely as possible to spending needs at each level of government. The Reform of Intergovernmental Fiscal Relations in Developing and Emerging Market Economies
373 citations
TL;DR: In this paper, the authors developed an index for the quality of governance for a sample of 80 countries and applied the index to the debate on the appropriate level of fiscal decentralization.
Abstract: Debates about the appropriate role, policies, and institutions of the state are often hampered by the lack of a definition for good government. To provide a quantifiable measure of good government, the authors develop an index for the quality of governance for a sample of 80 countries. They apply the index to the debate on the appropriate level of fiscal decentralization. In measuring the quality of governance, the authors develop indices for the government's ability to: a) Ensure political transparency and a voice for all citizens (the citizen participation index measures political freedom and political stability). b) Provide effective public services efficiently (the government orientation index measures judicial and bureaucratic efficiency and the absence of corruption). c) Promote the health and well-being of its citizens (the social development index measures human development and equitable distribution of income). d) Create a favorable climate for stable economic growth (the economic management index measures outward orientation, independence of the central bank, and an inverted debt-to-GDP ratio). In relating the index of governance quality to degree of fiscal decentralization for the 80 countries, the authors are not surprised to find a positive relationship between fiscal decentralization and quality of governance. But the strength of the correlation is surprising.
345 citations