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Less than you thought: The fiscal autonomy of sub-central governments

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  • Hansjörg Blöchliger
  • David King

Abstract

State and local governments in OECD countries have access to various fiscal resources. Discretion over them varies considerably, and so does sub-central governments’ power to shape their budget and to determine outcomes like public sector efficiency, equity in access to public services or the long term fiscal stance. Data on the revenue structure of sub-central governments (SCG) would therefore be helpful. But indicators have long insufficiently reflected the way state and local budgets are funded. The most frequently used indicator is the ratio of SCG to total tax revenue, which is a poor measure for assessing the true autonomy SCGs enjoy. Since the power over fiscal revenue is a critical determinant for government finance, a set of more refined indicators for assessing fiscal autonomy should be established.

Suggested Citation

  • Hansjörg Blöchliger & David King, 2007. "Less than you thought: The fiscal autonomy of sub-central governments," OECD Economic Studies, OECD Publishing, vol. 2006(2), pages 155-188.
  • Handle: RePEc:oec:ecokaa:5l4jgl68fjr7
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    File URL: http://dx.doi.org/10.1787/eco_studies-v2006-art12-en
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    Cited by:

    1. Luiz de Mello & João Tovar Jalles, 2018. "The global crisis and intergovernmental relations: Revisiting the centralisation-decentralisation debate ten years on," Working Papers. Collection A: Public economics, governance and decentralization 1803, Universidade de Vigo, GEN - Governance and Economics research Network.
    2. 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).
    3. Allers, Maarten A. & Vermeulen, Wouter, 2016. "Capitalization of equalizing grants and the flypaper effect," Regional Science and Urban Economics, Elsevier, vol. 58(C), pages 115-129.
    4. Richard M. Bird, 2008. "Tax Assignment Revisited," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0805, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Hansjörg Blöchliger & José Maria Pinero Campos, 2011. "Tax Competition Between Sub-Central Governments," OECD Economics Department Working Papers 872, OECD Publishing.
    6. Rob Ball & David Eiser & David King, 2015. "Assessing Relative Spending Needs of Devolved Government: The Case of Healthcare Spending in the UK," Regional Studies, Taylor & Francis Journals, vol. 49(2), pages 323-336, February.
    7. Wouter Vermeulen & Maarten Allers, 2013. "Fiscal Equalization and Capitalization: Evidence from a Policy Reform," CPB Discussion Paper 245, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Dufrénot, G. & Frouté, P. & Schalck, C., 2010. "The French Regions’ Borrowing Behaviours. How heterogeneous are they?," Working papers 289, Banque de France.
    9. Liesbet Hooghe & Gary Marks, 2012. "Beyond Federalism - Estimating and Explaining the Territorial Structure of Government," KFG Working Papers p0037, Free University Berlin.
    10. repec:dgr:rugsom:13014-eef is not listed on IDEAS
    11. Allers, Maarten & Merkus, Erik, 2013. "Soft budget constraint but no moral hazard? The Dutch local government bailout puzzle," Research Report 13014-EEF, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    12. repec:dgr:rugsom:14023-eef is not listed on IDEAS
    13. Richard M. Bird, 2015. "Fiscal Decentralization and Decentralizing Tax Administration: Different Questions, Different Answers," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1509, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    14. Peter Claeys, 2011. "If you want me to stay, pay," IREA Working Papers 201101, University of Barcelona, Research Institute of Applied Economics, revised Feb 2011.
    15. Bernard Dafflon, 2013. "Voluntary amalgamation of local governments: the Swiss debate in the European context," Chapters,in: The Challenge of Local Government Size, chapter 8, pages 189-220 Edward Elgar Publishing.
    16. Daniel Artana & Sebastián Auguste & Marcela Cristini & Cynthia Moskovits & Ivana Templado, 2012. "Sub-National Revenue Mobilization in Latin American and Caribbean Countries: The Case of Argentina," IDB Publications (Working Papers) 3887, Inter-American Development Bank.

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