Fiscal Decentralization and the Challenge of Hard Budget Constraints PDF Download

Author: Jonathan Rodden
Publisher: MIT Press
ISBN: 9780262182294
Category : Business & Economics
Languages : en
Pages : 502

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Book Description
A multi-country study of the conditions under which decentralized countries might ensure fiscal discipline.

Author: Jonathan Rodden
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
Since the early 1980s fiscal and political decentralization have spread around the world. But decentralization can encourage dangerous opportunistic behavior by state and local officials. Left unrestricted, such opportunism can undermine macroeconomic stability and other objectives. The most pressing manifestation of this problem is the softening of subnational budget constraints. The impact of decentralization on public sector efficiency and macroeconomic stability depends on a country's ability to prevent lower-level governments from passing on their liabilities to higher-level governments. This note draws on 11 countries to identify institutional factors associated with hard and soft budget constraints and extract policy lessons for other countries.

Author: Era Dabla-Norris
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 50

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Book Description
This paper examines key aspects of the ongoing decentralization process in transition economies and identifies areas where the present systems can have potentially adverse impacts on both service delivery and macroeconomic performance. We discuss three critical principles of a sound and efficient decentralized fiscal system-and then show the contrasts between these and actual trends and policies in transition countries.

Author: Laura von Daniels
Publisher: Edward Elgar Publishing
ISBN: 1783475951
Category : Business & Economics
Languages : en
Pages : 221

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Book Description
How can governments control spending pressure from influential groups, often representing powerful regional interests? This book is concerned with institutional solutions that allow modern nation states to balance historically grown cultural, political and economic diversity. Laura von Daniels combines different literatures in economics and political science, and draws on interviews with former government leaders, and country experts from international organizations. She applies this research to topics such as fiscal institutions and budget balances, presenting a critical review of different institutional approaches to resolving fiscal imbalances and public indebtedness. Students and scholars of various disciplines, including politics, public and social policy, economics and business will find the discussions and detailed description of institutional reforms in emerging market nations to be of use to their research. It will also be of interest to practitioners working on fiscal decentralization and budget control.

Author: Guiseppe Pisauro
Publisher: INTERNATIONAL MONETARY FUND
ISBN: 9781451848687
Category :
Languages : en
Pages : 30

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Book Description
Fiscal decentralization is likely to entail a bias in the budget process toward higher public expenses and deficits. The paper reviews lessons drawn from the theoretical literature and international experience on the design of intergovernmental relations. The institutional setup should address the dual problem of "common tax resources" and "soft" budget constraints, where policies devised to correct one problem may exacerbate the other. An approach based on full tax autonomy of lower-tier governments and reliance on market discipline, not supplemented by self-imposed constitutional limits, is not advisable. More effective seems to be a cooperative approach with some preeminence granted to the central government.

Author: Roy Bahl
Publisher: Edward Elgar Publishing
ISBN: 1786435306
Category : Business & Economics
Languages : en
Pages : 430

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Book Description
This book draws on experiences in developing countries to bridge the gap between the conventional textbook treatment of fiscal decentralization and the actual practice of subnational government finance. The extensive literature about the theory and practice is surveyed and longstanding problems and new questions are addressed. It focuses on the key choices that must be made in decentralizing, on how economic and political factors shape the choices that countries make, and on how, by paying more attention to the need for a more comprehensive approach and the critical connections between different components of decentralization reform, everyone involved might get more for their money.

Author: Aehyung Kim
Publisher: World Bank Publications
ISBN:
Category : Banks and Banking Reform
Languages : en
Pages : 27

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Book Description
Abstract: This paper discusses decentralization (administrative, fiscal and political) of government in public service provision. It aims to facilitate understanding among practitioners, policy makers, and scholars about what decentralization entails in practice compared to theory. A review of the empirical literature and experience of decentralization is presented. The paper highlights issues that policy makers in developing and transitional countries should be aware of when reforming government, considering their unique political and economic environment. The author argues that decentralization produces efficiency gains stemming from inter-jurisdictional competition, enhanced checks and balances over the government through voting at the subnational level, and informational advantages due to proximity to citizens. By contrast, arguments against decentralization include the risk of an increased level of corruption, coordination problems stemming from multiple layers of government, low capacity of subnational government, and unproductive inter-jurisdictional competition. Decentralization itself does not render increased government effectiveness in public service provision. Instead, the effectiveness of government largely depends on the quality of human capital and institutions.

Author: Andrei Timofeev
Publisher:
ISBN:
Category :
Languages : en
Pages : 49

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Book Description

Author: International Monetary Fund. Fiscal Affairs Dept.
Publisher: International Monetary Fund
ISBN: 1498335810
Category : Business & Economics
Languages : en
Pages : 55

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Book Description
Fiscal decentralization has been, and remains high on the policy agenda of many countries. It is mainly driven by political pressures, which tend to be especially evident in countries with multiple ethnicities, and/or wide regional disparities in incomes or resource endowments. More generally, decentralization pressures frequently reflect a desire for more participatory government and greater voice of local constituents in the allocation of budgetary resources. Regardless of its motivation, fiscal decentralization can have important macroeconomic implications. Therefore, Fund advice to member countries (whether in the context of surveillance, program design, or technical assistance) has often focused on the design and implementation of intergovernmental fiscal arrangements. This paper distills the main lessons from the Fund’s engagement with member countries in this area, drawing in particular, (but not exclusively) on technical assistance (TA) provided by the Fiscal Affairs Department (FAD) to ten countries which are broadly representative of the range of members that have requested assistance in this area.

Author: Jonathan Rodden
Publisher: Cambridge University Press
ISBN: 0521842697
Category : Business & Economics
Languages : en
Pages : 335

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Book Description
As new federations take shape and old ones are revived around the world, a difficult challenge is to create incentives for fiscal discipline. By combining theory, quantitative analysis, and historical and contemporary case studies, this book lays out the first systematic explanation of why decentralized countries have had dramatically different fiscal experiences. It provides insights into current policy debates from Latin America to the European Union, and a new perspective on a tension between the promise and peril of federalism that has characterized the literature since The Federalist Papers.