IDEAS home Printed from https://ideas.repec.org/a/eso/journl/v46y2015i3p459-484.html
   My bibliography  Save this article

A Needs and Resources Assessment of Fiscal Equalisation in the Irish Local Government System

Author

Listed:
  • Gerard Turley

    (National University of Ireland, Galway)

  • Darragh Flannery

    (University of Limerick)

  • Stephen McNena

    (National University of Ireland, Galway)

Abstract

In 2000 the central government in Ireland introduced a formula-based needs and resources equalisation model in its local government system to ensure that the allocation of general purpose grants to local authorities was done in an equitable manner. However, the equalisation model is lacking in transparency, with few details publicly available as to its exact specification. Within this context, the purpose of this paper is to critically assess fiscal equalisation in Ireland’s local government system. More specifically we address the question of whether general purpose equalisation grants bear any relation to expenditure needs and fiscal resources. We achieve this by estimating our own model based upon a number of indicators of potential need and available resources. We outline a number of alternative equalisation models based on different objective criteria, and compare the simulated allocations resulting from the alternative models to the actual general purpose grants, with a view to partly explaining past allocations but also identifying improvements in the future design of fiscal equalisation in Ireland. Our findings show politically sensitive redistribution away from county councils towards city councils, resulting in new winners and losers. The results for Dublin City Council raise the question of whether, given its population size, level of economic activity and budget, it should be treated separately and as a special case with respect to intergovernmental fiscal relations in Ireland.

Suggested Citation

  • Gerard Turley & Darragh Flannery & Stephen McNena, 2015. "A Needs and Resources Assessment of Fiscal Equalisation in the Irish Local Government System," The Economic and Social Review, Economic and Social Studies, vol. 46(3), pages 459-484.
  • Handle: RePEc:eso:journl:v:46:y:2015:i:3:p:459-484
    as

    Download full text from publisher

    File URL: https://www.esr.ie/article/view/402/118
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James M. Buchanan, 1952. "Federal Grants and Resource Allocation," Journal of Political Economy, University of Chicago Press, vol. 60, pages 208-208.
    2. Robin Boadway, 2004. "The Theory and Practice of Equalization," CESifo Economic Studies, CESifo, vol. 50(1), pages 211-254.
    3. Daniel Bergvall & Claire Charbit & Dirk-Jan Kraan & Olaf Merk, 2006. "Intergovernmental Transfers and Decentralised Public Spending," OECD Journal on Budgeting, OECD Publishing, vol. 5(4), pages 111-158.
    4. James M. Buchanan, 1952. "Federal Grants and Resource Allocation: A Reply," Journal of Political Economy, University of Chicago Press, vol. 60, pages 536-536.
    5. Gerard Turley & Geraldine Robbins & Stephen McNena, 2015. "A Framework to Measure the Financial Performance of Local Governments," Local Government Studies, Taylor & Francis Journals, vol. 41(3), pages 401-420, May.
    6. Ridge, M, 1992. "Local government finance and equalisation: the case of Ireland," Fiscal Studies, Institute for Fiscal Studies, vol. 13(3), pages 54-73, January.
    7. Oakland, William H., 1994. "Fiscal Equalization: An Empty Box?," National Tax Journal, National Tax Association, vol. 47(1), pages 199-209, March.
    8. Oakland, William H., 1994. "Fiscal Equalization: An Empty Box?," National Tax Journal, National Tax Association;National Tax Journal, vol. 47(1), pages 199-209, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gerard Turley & Stephen McNena, 2016. "An Analysis of Local Public Finances and the 2014 Local Government Reforms," The Economic and Social Review, Economic and Social Studies, vol. 47(2), pages 299-326.
    2. Turley Gerard & McNena Stephen, 2019. "Local government funding in Ireland: Contemporary issues and future challenges," Administration, Sciendo, vol. 67(4), pages 1-26, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Albouy, David, 2012. "Evaluating the efficiency and equity of federal fiscal equalization," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 824-839.
    2. Philippe Cyrenne & Manish Pandey, 2015. "Fiscal equalization, government expenditures and endogenous growth," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 311-329, April.
    3. Boadway, Robin & Tremblay, Jean-François, 2012. "Reassessment of the Tiebout model," Journal of Public Economics, Elsevier, vol. 96(11), pages 1063-1078.
    4. Carmela Brugnano & Giuseppe Ferraina & Andrea Ferri & Larysa Minzyuk & Felice Russo, 2017. "Federalismo municipale e nuovo sistema perequativo: il Fondo di solidarietà comunale 2016," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(2), pages 93-133.
    5. Breuillé, Marie-Laure & Madiès, Thierry & Taugourdeau, Emmanuelle, 2010. "Gross versus net equalization scheme in a federation with decentralized leadership," Journal of Urban Economics, Elsevier, vol. 68(2), pages 205-214, September.
    6. Chris Murphy, 2017. "Optimal fiscal equalisation and its application to Australia," Departmental Working Papers 2017-12, The Australian National University, Arndt-Corden Department of Economics.
    7. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June.
    8. Robin Boadway & Katherine Cuff, 2017. "The impressive contribution of Canadian economists to fiscal federalism theory and policy," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1348-1380, December.
    9. Robin W. Boadway & Paul A. R. Hobson & Nobuki Mochida, 2000. "Fiscal Equalization in Japan: Assessment and Recommendations," CIRJE F-Series CIRJE-F-94, CIRJE, Faculty of Economics, University of Tokyo.
    10. Beata Guziejewska, 2008. "Efektywność finansów samorządu terytorialnego," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 71-89.
    11. Alexander Cappelen & Bertil Tungodden, 2007. "Local autonomy and interregional equality," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(3), pages 443-460, April.
    12. Toolsema-Veldman, Linda & Allers, M.A., 2012. "Welfare financing," Research Report 12004-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    13. Campbell, Colin D. & Fischel, William A., 1996. "Preferences for School Finance Systems: Voters Versus Judges," National Tax Journal, National Tax Association, vol. 49(1), pages 1-15, March.
    14. Chris Murphy, 2018. "Optimal fiscal equalisation and its application to Australia: updated," Departmental Working Papers 2018-13, The Australian National University, Arndt-Corden Department of Economics.
    15. repec:dgr:rugsom:12004-eef is not listed on IDEAS
    16. Nechyba, Thomas, 1996. "A computable general equilibrium model of intergovernmental aid," Journal of Public Economics, Elsevier, vol. 62(3), pages 363-397, November.
    17. Vermeulen, W. & Allers, Maarten, 2014. "Fiscal equalization, capitalization and the flypaper effect," Research Report 14023-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    18. Alain Marciano, 2020. "How Buchanan’s concern for the South shaped his first academic works," Public Choice, Springer, vol. 183(3), pages 247-271, June.
    19. Luc Eyraud & Robin Boadway, 2018. "Designing Sound Fiscal Relations Across Government Levels in Decentralized Countries," IMF Working Papers 2018/271, International Monetary Fund.
    20. Campbell, Colin D. & Fischel, William A., 1996. "Preferences for School Finance Systems: Voters Versus Judges," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(1), pages 1-15, March.
    21. Aaronson, Daniel, 1999. "The Effect of School Finance Reform on Population Heterogeneity," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(1), pages 5-29, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:46:y:2015:i:3:p:459-484. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.esr.ie .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Martina Lawless (email available below). General contact details of provider: https://www.esr.ie .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.