Designing Sound Fiscal Relations Across Government Levels in Decentralized Countries

This paper discusses how decentralized countries can achieve sound fiscal relations between the central government and lower government levels. The concepts of “vertical gap” and “vertical balance” provide an analytical framework for identifying and addressing key challenges. These concepts can help...

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Bibliographic Details
Main Author: Boadway, Robin
Other Authors: Eyraud, Luc
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2018
Series:IMF Working Papers
Subjects:
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
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245 0 0 |a Designing Sound Fiscal Relations Across Government Levels in Decentralized Countries  |c Robin Boadway, Luc Eyraud 
260 |a Washington, D.C.  |b International Monetary Fund  |c 2018 
300 |a 44 pages 
651 4 |a Canada 
653 |a Fiscal stance 
653 |a Revenue administration 
653 |a Fiscal federalism 
653 |a Secession 
653 |a State and Local Budget and Expenditures 
653 |a Labour 
653 |a Public finance & taxation 
653 |a State and Local Taxation, Subsidies, and Revenue 
653 |a Federalism 
653 |a State and Local Government 
653 |a Fiscal Policy 
653 |a Structure, Scope, and Performance of Government 
653 |a Unemployment 
653 |a Aggregate Labor Productivity 
653 |a Public employment 
653 |a Fiscal policy 
653 |a Intergovernmental Relations: General 
653 |a Aggregate Human Capital 
653 |a National Government Expenditures and Related Policies: General 
653 |a Labor 
653 |a Expenditure 
653 |a Taxation, Subsidies, and Revenue: General 
653 |a Expenditures, Public 
653 |a Macroeconomics 
653 |a Wages 
653 |a Economic theory 
653 |a Intergovernmental Relations 
653 |a Intergenerational Income Distribution 
653 |a Public Finance 
653 |a Income economics 
653 |a State and Local Borrowing 
653 |a Revenue 
653 |a Employment 
700 1 |a Eyraud, Luc 
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520 |a This paper discusses how decentralized countries can achieve sound fiscal relations between the central government and lower government levels. The concepts of “vertical gap” and “vertical balance” provide an analytical framework for identifying and addressing key challenges. These concepts can help policymakers ensure that the financing of subnational governments (composed of transfers received from the center, own revenues, and borrowing) is both efficient and adequate given the allocation of spending responsibilities. More generally, the paper offers some perspectives about the optimal design of decentralization systems by examining the sequencing and economic principles underlying revenue and expenditure assignments, the use of transfers, and borrowing