Fiscal Aspects of Evolving Federations: Issues for Policy and Research

There has been a resurgence of interest, in many parts of the world, in problems of multi-level government finance. Recent and ongoing political and economic developments raise questions about the role of the nation, subnational governments, and supranational public authorities in the provision and financing of public-sector programs. This paper presents a selective survey of some of these developments and identifies issues for research. Problems of fiscal decentralization and intergovernmental fiscal relations are of wide-spread concern in developing countries. These issues also arise in the context of European economic integration. However, established federations in developed countries, particularly the United States and Canada, have been the traditional focus of economic research on fiscal federalism. This paper reviews selected major policy issues and trends involving multi-level government finance and intergovernmental fiscal relations in