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Financing Regions and Local Governments: Problems and Perspectives

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  • Paolo Liberati

Abstract

This paper deals with how the reform regulating fiscal federalism in Italy (L. 42/2009) addresses three problems. First, how to finance additional sub-central competencies with local taxes, especially when they involve the provision of minimum or essential levels of service (e.g. health). Second, how to solve the trade-off between the need for greater efficiency and the need to equalise the lower endowment of the poorer regions. Third, whether local governments should have a direct relationship with the central government or whether the regions may successfully fund and equalise the fiscal capacity of local governments within their territories.

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Bibliographic Info

Article provided by Associazione Rossi Doria in its journal QA.

Volume (Year): (2011)
Issue (Month): 1 (March)
Pages:

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Handle: RePEc:rar:journl:0206

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Related research

Keywords: Fiscal federalism; Equalisation; Minimum standards;

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  1. Martin Besfamille & Ben Lockwood, 2008. "Bailouts In Federations: Is A Hard Budget Constraint Always Best?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(2), pages 577-593, 05.
  2. Wildasin, David E., 1997. "Externalities and bailouts : hard and soft budget constraints in intergovernmental fiscal relations," Policy Research Working Paper Series 1843, The World Bank.
  3. SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des Mathématiques Economiques – Document de travail de l’I.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
  4. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June.
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