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Intergovernmental Transfers: The Funding Rule and Mechanisms

In: Fiscal Equalization

Author

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  • Paul Bernd Spahn

    (Goethe University)

Abstract

No federal or decentralized system of government can function without intergovernmental transfers. Once responsibilities are assigned to the different public agencies both vertically and horizontally, a typical outcome is vertical and horizontal fiscal imbalances. It means that the assignment of revenue does not fully match the expenditure functions for each public agency. It requires interagency transfers to allow all jurisdictions to carry out their respective public responsibilities.

Suggested Citation

  • Paul Bernd Spahn, 2007. "Intergovernmental Transfers: The Funding Rule and Mechanisms," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 163-204, Springer.
  • Handle: RePEc:spr:sprchp:978-0-387-48988-9_8
    DOI: 10.1007/978-0-387-48988-9_8
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    Cited by:

    1. Di Liddo, Giuseppe, 2017. "Are local agreements on equalization grants possible? A bargaining model with quasi-linear local preferences on local public goods," Economics Letters, Elsevier, vol. 153(C), pages 9-11.

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