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A Restatement of the Case for Fiscal Autonomy (or: The Barnett Formula - a formula for Rake's Progress)

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  • P Hallwood
  • R.MacDonald

Abstract

In this paper, we rebut the case that Ashcroft, Christie and Swales (2006) make in favour of the status quo fiscal settlement in Scotland that stems from the Scotland Act 1998. This Act in creating the Scottish Parliament and Executive effectively separated public spending by the Scottish government from the need to raise taxes to finance it; rather, financing comes from Westminster through the Barnett formula. We do not think that these arrangements provide a stable political solution in the UK, as is evidenced by the so-called West Lothian question - a matter that may be becoming of greater concern in England than hitherto. Scotland, therefore, should be forewarned that even if it does not move from the status quo, movement might anyway be forced on it.

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File URL: http://www.gla.ac.uk/media/media_22184_en.pdf
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Bibliographic Info

Paper provided by Business School - Economics, University of Glasgow in its series Working Papers with number 2006_14.

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Handle: RePEc:gla:glaewp:2006_14

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  1. Ronald MacDonald & Paul Hallwood, 2004. "The Economic Case for Fiscal Federalism in Scotland," Working papers 2004-42, University of Connecticut, Department of Economics.
  2. Akai, Nobuo & Sakata, Masayo, 2002. "Fiscal decentralization contributes to economic growth: evidence from state-level cross-section data for the United States," Journal of Urban Economics, Elsevier, vol. 52(1), pages 93-108, July.
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Cited by:
  1. Paul Hallwood, 2008. "Minimizing the Price of Tranquility: How to Discourage Scotland's Secession from the United Kingdom," Working papers 2008-23, University of Connecticut, Department of Economics.
  2. Paul Hallwood & Ronald MacDonald, 2008. "A Review of the Empirical Evidence on the Effects of Fiscal Decentralization on Economic Efficiency: With Comments on Tax Devolution to Scotland," Working papers 2008-46, University of Connecticut, Department of Economics.

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