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The Federal Approach to FiscalDecentralisation: Conceptual Contours for Policy Makers

Author

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  • Sharma, Chanchal Kumar

Abstract

Chanchal Kumar Sharma,in his paper demonstrates that in order for fiscal decentralisation to be effective, it must be approached federally. A federal approach is not a decentralised approach but a dynamically balanced approach; one that constantly keeps on adjusting the contrasting forces of centralisation and decentralisation to create a system that can ensure good governance in accordance with the rapidly changing global and local scenario. According to the author, the good governance of the present time has to be federally flexible and dynamically decentralised and institutions of fiscal federalism are crucial for achieving such a dynamic equilibrium. Fiscal decentralisation cannot be detached from the broader principles of fiscal federalism if it is to be successful, irrespective of the fact of whether it is being carried out in a federal or non-federal country. He argues that too much decentralisation or an overly strong central federal government precludes the survival of a constitutional federal state.

Suggested Citation

  • Sharma, Chanchal Kumar, 2003. "The Federal Approach to FiscalDecentralisation: Conceptual Contours for Policy Makers," MPRA Paper 178, University Library of Munich, Germany, revised May 2005.
  • Handle: RePEc:pra:mprapa:178
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    File URL: https://mpra.ub.uni-muenchen.de/178/1/MPRA_paper_178.pdf
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    References listed on IDEAS

    as
    1. Wildasin, David E., 1989. "Interjurisdictional capital mobility: Fiscal externality and a corrective subsidy," Journal of Urban Economics, Elsevier, vol. 25(2), pages 193-212, March.
    2. Shah, Anwar, 2004. "Fiscal decentralization in developing and transition economies: progress, problems, and the promise," Policy Research Working Paper Series 3282, The World Bank.
    3. Persson, Torsten & Tabellini, Guido, 1996. "Federal Fiscal Constitutions: Risk Sharing and Moral Hazard," Econometrica, Econometric Society, vol. 64(3), pages 623-646, May.
    4. Yingyi Qian & Barry R. Weingast, 1996. "China's transition to markets: market-preserving federalism, chinese style," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 1(2), pages 149-185.
    5. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Sharma, Chanchal Kumar, 2014. "Governance,Governmentality and Governability: Constraints and Possibilities of Decentralization in South Asia," MPRA Paper 61349, University Library of Munich, Germany, revised 15 Jan 2015.
    2. Alina Ligia Dumitrescu, 2013. "The Fiscal Federalism And The Good Economic Governance In European Union," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 1(2), pages 25-33, November.
    3. Connelly, John, 2008. "ICT Governance: Towards Federalized Structure and Solution," MPRA Paper 12365, University Library of Munich, Germany.
    4. Sharma, Chanchal Kumar, 2008. "Emerging Dimensions Of Decentralization Debate In The Age Of Glocalization," MPRA Paper 6734, University Library of Munich, Germany.

    More about this item

    Keywords

    Federalism; Fiscal Decentralization; centralization;

    JEL classification:

    • Z0 - Other Special Topics - - General
    • H1 - Public Economics - - Structure and Scope of Government
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H8 - Public Economics - - Miscellaneous Issues
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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