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Fiscal Federalism in Europe: Lessons From the United States Experience

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  • Robert P. Inman
  • Daniel L. Rubinfeld

Abstract

The existing political and legal institutions of fiscal policy-making are under challenge. As the United States and the eastern European and Soviet states experiment with policy decentralization, the states of western Europe are looking to a more centralized policy structure via the E.E.C.. This paper seeks to raise issues of importance to all such reform efforts--notably, the need to consider, and balance, the inefficiencies of fiscal policy decentralization (spillovers and wasteful fiscal competition) against the inefficiencies of fiscal policy centralization (policy cycles and localized 'pork barrel' spending and taxes). The need to develop new fiscal policy institutions emphasizing voluntary agreements and responsive 'agenda-setters' is stressed.

Suggested Citation

  • Robert P. Inman & Daniel L. Rubinfeld, 1991. "Fiscal Federalism in Europe: Lessons From the United States Experience," NBER Working Papers 3941, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3941
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    References listed on IDEAS

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    Cited by:

    1. Eugen DOGARIU, 2010. "Theoretical Aspects of Optimizing the Allocation of Public Financial Resources at Local Level," Timisoara Journal of Economics, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 3(3(11)), pages 147-156.
    2. Mihai Ioan Mutascu & Bogdan Dima, 2005. "Politics And Interjurisdictional Transfers: The Romanian Case," Urban/Regional 0512009, University Library of Munich, Germany.
    3. M. Mar㈠& M. Sarcinelli, 1994. "The European Union: how to assign the functions of government," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 47(191), pages 341-377.
    4. Pinto, Santiago M., 2004. "Assistance to poor households when income is not observed: targeted in-kind and in-cash transfers," Journal of Urban Economics, Elsevier, vol. 56(3), pages 536-553, November.
    5. M. Mar㈠& M. Sarcinelli, 1994. "The European Union: how to assign the functions of government," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 47(191), pages 341-377.
    6. Mihai, Mutascu, 2008. "The Vote, The Politics and the interjurisdictional Transfers: The Romanian Case," MPRA Paper 12048, University Library of Munich, Germany.
    7. Anwar Shah, 2006. "Fiscal decentralization and macroeconomic management," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(4), pages 437-462, August.
    8. Mutaşcu, Mihai Ioan & Crasneac, Alexandru Ocatavian & Dănuleţiu, Dan-Constantin, 2007. "The Taxes Impact On The Economic Growth: The Case Of European Union," MPRA Paper 6143, University Library of Munich, Germany.
    9. Shah, Anwar, 2005. "Fiscal decentralization and fiscal performance," Policy Research Working Paper Series 3786, The World Bank.

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