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Central Regulation of Local Authorities

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  • Fredrik Carlsen

    (Norwegian University of Science and Technology)

Abstract

Decentralized provision of services allows communities to adapt to local variations in preferences. However, surveys show that central regulation of local sector revenue, spending, and borrowing decisions is pervasive. This article argues that one rationale for central regulations is to prevent local authorities from distorting allocation decisions in order to drive up intergovernmental grants. By limiting the local sector's discretion to act strategically, regulations give the government leeway in setting grants.

Suggested Citation

  • Fredrik Carlsen, 1998. "Central Regulation of Local Authorities," Public Finance Review, , vol. 26(4), pages 304-326, July.
    • Handle: RePEc:sae:pubfin:v:26:y:1998:i:4:p:304-326
    DOI: 10.1177/109114219802600402
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    References listed on IDEAS

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    Cited by:

    1. Mr. Guiseppe Pisauro, 2001. "Intergovernmental Relations and Fiscal Discipline: Between Commons and Soft Budget Constraints," IMF Working Papers 2001/065, International Monetary Fund.
    2. Pilar Sorribas-Navarro, 2006. "(When) Are Intergovernmental Transfers Used to Bail Out Regional Governments? Evidence from Spain 1986-2001," Working Papers 2006/7, Institut d'Economia de Barcelona (IEB).
    3. Sorribas-Navarro, Pilar, 2011. "Bailouts in a fiscal federal system: Evidence from Spain," European Journal of Political Economy, Elsevier, vol. 27(1), pages 154-170, March.
    4. Eyraud, Luc & Lusinyan, Lusine, 2013. "Vertical fiscal imbalances and fiscal performance in advanced economies," Journal of Monetary Economics, Elsevier, vol. 60(5), pages 571-587.
    5. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June.
    6. Pilar Sorribas-Navarro, 2006. "(When) Are Intergovernmental Transfers Used to Bail Out Regional Governments? Evidence from Spain 1986-2001," Working Papers 2006/7, Institut d'Economia de Barcelona (IEB).

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