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2012•RePEc: Research Papers in EconomicsRequires access

Fiscal decentralisation and fiscal discipline

Matteo Governatori, David Yim

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Abstract

This section analyses the relationship between fiscal decentralisation to the subnational level and fiscal outcomes for general government. (26) The purpose is to assess whether devolving expenditure functions and revenue sources to subnational entities, as has generally occurred across the euro area, may have adverse consequences on overall government fiscal balances. Such consequences might be due to loss of central government control over subnational fiscal behaviour and to weaker incentives for fiscal discipline at that level.

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What this paper is about

This section analyses the relationship between fiscal decentralisation to the subnational level and fiscal outcomes for general government. (26) The purpose is to assess whether devolving expenditure functions and revenue sources to subnational entities, as has generally occurred across the euro area, may have adverse consequences on overall government fiscal balances. Such consequences might be due to loss of central government control over subnational fiscal behaviour and to weaker incentives for fiscal discipline at that level.

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Available abstract

This section analyses the relationship between fiscal decentralisation to the subnational level and fiscal outcomes for general government. (26) The purpose is to assess whether devolving expenditure functions and revenue sources to subnational entities, as has generally occurred across the euro area, may have adverse consequences on overall government fiscal balances. Such consequences might be due to loss of central government control over subnational fiscal behaviour and to weaker incentives for fiscal discipline at that level.

Key concepts: Decentralization, Fiscal imbalance, Fiscal federalism, Fiscal union, Economics, Revenue, Fiscal policy, Government (linguistics)

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