By Hansjörg Blöchliger and Claire Charbit Fiscal equalisation is a transfer of fiscal resources across jurisdictions to offset disparities in revenue raising capacity or public service cost. It covers on average 2.5% of GDP or 5% of total government expenditure across OECD countries. Equalisation reduces fiscal disparities by two-thirds on average and in some countries levels them virtually out. Strong equalisation comes at a price: on average, around 70% of a jurisdiction’s additional tax income must be dedicated to an equalisation fund. The equalisation rate is generally higher for jurisdictions with low fiscal capacity, reducing their tax effort and likely to slow down regional economic convergence. Cost equalisation is larger than revenue equalisation in terms of GDP despite smaller cost disparities, pointing at inefficiencies in the distribution formulae. Fiscal equalisation can be pro-cyclical but most countries succeed in reducing fluctuations of entitlements, sometimes at the cost of sub-central budget needs. Fiscal equalisation is very country specific, and data and analysis must be taken with care.
Hispermanent, immediate and instant availability as well as his stimulating support, encouragement, suggestions, and confidence in my enabled abilities have become an endless and renewable source of my energy and motivation. It is quite impossible for me to imagine completing this work without his pragmatic guidance and the relevant background reading materials he recommended me. I also owe a lot to my Co-Supervisor, Associate Professor Uğur SADIOĞLU for his seasoned opinions, constructive feedbacks and positive impression which provided me with tremendous confidence in finishing this work. I also sincerely appreciate Prof. Dr. Mustafa KILIÇ, in his capacity of member of my thesis supervisory committee, for his precious comments during my thesis's work progress. Without their help and supports, I could not favorably complete my thesis work.
Organisation de Coopération et de Développement Économiques Organisation for Economic Cooperation and Development 22-Apr-2015 ___________________________________________________________________________________________ _____________ English-Or. English ECONOMICS DEPARTMENT REFORMING THE TAX ON IMMOVABLE PROPERTY: TAKING CARE OF THE UNLOVED ECONOMICS DEPARTMENT WORKING PAPERS No. 1205 By Hansjörg Blöchliger OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author.
JT03401144Complete document available on OLIS in its original format This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. ECO/WKP(2016) The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.Latvia was not an OECD Member at the time of preparation of this publication. Accordingly, Latvia does not appear in the list of OECD Members and is not included in the zone aggregates. © OECD (2016)You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for commercial use and translation rights should be submitted to rights@oecd.org ECO/WKP(2016)54 3 ABSTRACT Fiscal Decentralisation and Regional DisparitiesFiscal decentralisation can lead to a more efficient provision of local public goods and services and promote a better match between policies and citizens' preferences. At the same time, however, there are concerns about whether all regions will gain from more autonomy. Decentralisation may not lift all boats, with "poor" regions losing competitiveness with respect to better endowed ones, thus increasing regional disparities. The present work investigates the relationship between fiscal decentralisation and regional inequality within countries. Particular attention is paid to the different channels through which decentralisation can affect disparities: taxing powers, spending autonomy and the vertical fiscal imbalance. The empirical analysis, which is conducted on a sample of 30 OECD countries for the period 1995-2011, suggests that a balanced fiscal structure, where local spending is mainly financed by local taxation, reduces regional disparities, by providing an incentive to better use local resources and implement policies that favour economic development.Keywords: Fiscal decentralisation, regional inequality, panel data JEL Classification: H71; H77; R11 ***** RESUME Décentralisation budgétaire et disparités régionalesSi la décentralisation budgétaire peut permettre d'améliorer l'efficience de la fourniture des biens et services publics locaux et promouvoir une meilleure adéquation entre les politiques publiques et les préférences des citoyens, la question de savoir si toutes les régions peuvent tirer parti d'une plus grande autonomie est source de préoccupation. Il est possible que la décentralisation ne profite pas à toutes les régions, et qu'elle se traduise, pour les régions « pauvres » par une perte de compétitivité par rapport à d'autres mi...
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