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Fiscal decentralisation and fiscal discipline

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  • Matteo Governatori
  • David Yim

Abstract

This section analyses the relationship between fiscal decentralisation to the subnational level and fiscal outcomes for general government. (26) The purpose is to assess whether devolving expenditure functions and revenue sources to subnational entities, as has generally occurred across the euro area, may have adverse consequences on overall government fiscal balances. Such consequences might be due to loss of central government control over subnational fiscal behaviour and to weaker incentives for fiscal discipline at that level.

Suggested Citation

  • Matteo Governatori & David Yim, 2012. "Fiscal decentralisation and fiscal discipline," Quarterly Report on the Euro Area (QREA), Directorate General Economic and Financial Affairs (DG ECFIN), European Commission, vol. 11(4), pages 20-24, December.
  • Handle: RePEc:euf:qreuro:0114-02
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    Keywords

    fiscal decentralisation; fiscal discipline;

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