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The Spending Power of Sub-Central Governments: A Pilot Study

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Author Info
Steffen Bach
Hansjörg Blöchliger
Dominik Wallau

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Abstract

This pilot study presents indicators that assess sub-central government (SCG) spending power by policy area. Traditional indicators – such as the share of SCG in total government spending – are often misleading as they underestimate the impact of central government regulation on sub-central spending patterns. In order to gauge true spending power, a set of institutional indicators is established, based on a detailed assessment of institutional, regulatory and administrative control central government exerts over various SCG policy areas. Results tend to confirm the limited discretion of SCGs over their own budget. Education in particular – the main SCG budget item in most countries – is strongly shaped by central government regulation. Federal countries tend to grant more spending power to SCGs than unitary countries. With a few amendments, the framework of this study could be applied to all OECD countries, although it is advisable to restrict the analysis to the main sub-central spending areas.

L’autonomie budgétaire des administrations infranationales : un avant-projet
Cet avant-projet présente des indicateurs pour évaluer l’autonomie budgétaire des administrations infranationales (AI). Les indicateurs traditionnels – tels que la part des dépenses des AI dans les dépenses totales – sont souvent trompeurs car ils sous-estiment l’influence de la réglementation mise en place par le gouvernement central sur la ventilation des dépenses infra-nationales. Afin d’estimer la véritable autonomie des AI, un ensemble d’indicateurs a été développé sur la base d’une analyse détaillée du pouvoir institutionnel, réglementaire et administratif que le gouvernement central exerce sur les politiques menées par les AI. Les résultats tendent à confirmer que les AI disposent d’une autonomie limitée sur leurs propres dépenses. L’éducation en particulier – souvent le poste budgétaire le plus important des AI – est un domaine fortement modelé par le gouvernement central. Les pays fédéraux tendent à garantir une autonomie budgétaire plus élevée à leurs AI que les pays unitaires. En l’adaptant légèrement, le cadre de cette étude pourrait être appliqué à tous les pays membres de l’OCDE, bien qu’il soit recommandé de limiter l’analyse aux domaines principaux de l’action publique.

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Publisher Info
Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 705.

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Date of creation: 03 Jul 2009
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Handle: RePEc:oec:ecoaaa:705-en

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Related research
Keywords: fiscal federalism; local government; spending autonomy; autonomie budgétaire; collectivités territoriales; fédéralisme fiscal;

Find related papers by JEL classification:
H10 - Public Economics - - Structure and Scope of Government - - - General
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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This page was last updated on 2009-11-23.

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