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Financing Options for Devolved Government in the UK

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Author Info
James Gallagher
Daniel Hinze
Abstract

This study provides a comprehensive overview of the financing options for devolved government in the UK. Starting with a discussion of the present situation, the consequences and the possible future of the Barnett formula, the key economic and political principles for devolution finance are examined and then applied to possible financing options. The conclusion draws together the main points of the analysis and comments on the alternatives for funding the devolved administrations. While currently there appears to be considerable cross-party support for the Barnett system, it continues to be a contentious arrangement, with some observers even talking of a “fiscal crisis” (McLean (2005)). The paper therefore reviews the strengths and weaknesses of the present system, together with suggestions for possible changes.

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Paper provided by Department of Economics, University of Glasgow in its series Working Papers with number 2005_24.

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Handle: RePEc:gla:glaewp:2005_24

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  1. David King & Matthew Pashley & Rob Ball, 2004. "An English assessment of Scotland’s education spending needs," Fiscal Studies, Institute for Fiscal Studies, vol. 25(4), pages 439-466, December.
  2. Peter C. Smith, 2003. "Formula Funding of Public Services: An Economic Analysis," Oxford Review of Economic Policy, Oxford University Press, vol. 19(2), pages 301-322, Summer.
  3. Laura Blow & John Hall & Stephen Smith, 1996. "Financing regional government in the UK: some issues," Fiscal Studies, Institute for Fiscal Studies, vol. 17(4), pages 99-120, November. [Downloadable!]
  4. Isabelle Joumard & Per Mathis Kongsrud, 2003. "Fiscal Relations across Government Levels," OECD Economics Department Working Papers 375, OECD, Economics Department. [Downloadable!]
  5. Eric M. Engen & Jonathan Skinner, 1996. "Taxation and Economic Growth," NBER Working Papers 5826, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Arthur Midwinter, 2002. "Territorial Resource Allocation in the UK: A Rejoinder on Needs Assessment," Regional Studies, Taylor and Francis Journals, vol. 36(5), pages 563-567, July. [Downloadable!] (restricted)
  7. Julia Darby & Anton Muscatelli & Graeme Roy, 2002. "Fiscal federalism and Fiscal Autonomy: Lessons for the UK from other Industrialised Countries," Working Papers 2002_12, Department of Economics, University of Glasgow. [Downloadable!]
  8. Iain McLean & Alistair McMillan, 2003. "The Distribution of Public Expenditure across the UK Regions," Fiscal Studies, Institute for Fiscal Studies, vol. 24(1), pages 45-71, March.
  9. Ronald MacDonald & Paul Hallwood, 2004. "The Economic Case for Fiscal Federalism in Scotland," Working papers 2004-42, University of Connecticut, Department of Economics. [Downloadable!]
  10. Ulrich Thießen, 2003. "Fiscal Decentralisation and Economic Growth in High-Income OECD Countries," Fiscal Studies, Institute for Fiscal Studies, vol. 24(3), pages 237-274, September.
  11. repec:rus:hseeco:124076 is not listed on IDEAS
  12. Paulo Flavio Nacif Drummond & Ali M. Mansoor, 2002. "Macroeconomic Management and the Devolution of Fiscal Powers," IMF Working Papers 02/76, International Monetary Fund. [Downloadable!]
  13. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September. [Downloadable!] (restricted)
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