Reforming Taxation in the Scotland Act (1998): Hard Budget Constraints and the Inadequacy of the Calman Commission Proposals
AbstractWe demonstrate that both the Barnett formula used to calculate changes in public spending by the Scottish Parliament and Government under the Scotland Act (1998), as well as the recent Calman Commission proposals for fiscal reform, are soft budget constraints that do not and will not encourage the Scottish Government and Parliament to promote economic growth in Scotland and do not offer true accountability. However, fiscal autonomy would offer a hard budget constraint, and would encourage the adoption of policies aimed at growing the Scottish tax base and make the Scottish polity truly accountable. Secondly, fiscal autonomy is argued to be a viable fiscal reform within the existing and continuing UK constitutional settlement. Thirdly, existing empirical studies in-so-far as they relate to the Scottish case are shown to largely support the case for tax devolution.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Economics in its series Working papers with number 2010-19.
Length: 31 pages
Date of creation: Jul 2010
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Barnett formula; Calman Commission; fiscal autonomy; fiscal federalism; non-cooperative game; regional finance; Scottish Executive; Scottish Parliament; secession.;
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- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University
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