Fiscal decentralization in developing countries: an overview

Bird, Richard M.; Vaillancourt, François

doi:10.1017/cbo9780511559815.002

Cited by 116 publications

(114 citation statements)

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“…3 The fiscal aspects of public-sector restructuring in central and eastern Europe, the former Soviet Union, Latin America, and South Africa, are discussed in Bird et al (1995) and Bird and Vaillancourt (1998). contribute to macroeconomic instability, the question arises as to whether autonomous subnational governments will undermine overall fiscal discipline, for example through fiscal mismanagement that necessitates bailouts from higherlevel governments. 4 Very similar questions arise in the context of European monetary union, as exemplified in the well-known fiscal convergence criteria of the Maastricht Treaty, although, in this context, the "local" governments are actually the central governments of the member states.…”

Section: Introductionmentioning

confidence: 99%

The dynamics of municipal fiscal adjustment

Buettner

Wildasin

2006

Journal of Public Economics

112

106

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in THE DYNAMICS OF MUNICIPAL FISCAL ADJUSTMENT AbstractThe dynamic fiscal policy adjustment of local jurisdictions is investigated empirically using a panel of more than 1000 U.S. municipalities over a quarter of a century. Distinguishing own revenues, grants, expenditures, and debt service, the analysis is carried out using a vector error correction model which takes account of the intertemporal budget constraint. The results indicate that a large part of the fiscal adjustment to changes in any budgetary component takes place by an offsetting change in future expenditures. In addition, the results point to an important role of grants in maintaining budget balance as lower revenues and higher expenditures including debt service are followed by significant increases in grants. Decompositions of the sample according to average city population and initial debt burden reveal significant differences across subsamples. In particular, the role of grants in maintaining budget balance is much more pronounced with large cities whereas small cities tend to rely more on own revenues. Grants also play a more important role in the adjustment of cities with an initially high debt burden.JEL Classification: H72, H74, H77.

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Section: Introductionmentioning

confidence: 99%

The dynamics of municipal fiscal adjustment

Buettner

Wildasin

2006

Journal of Public Economics

112

106

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“…8 See Bird (1993), Bird and Vaillancourt (1997), and Martinez-Vazquez and McNab (1998) for a discussion of the difference between delegation, devolution, and deconcentration of fiscal authority.…”

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confidence: 99%

“…Only quite recently have normative discussions of fiscal decentralization added economic growth to the traditional list of public finance objectives of 11 See, for example, Bird and Vaillancourt (1997). The lack of preoccupation with economic growth in the fiscal decentralization literature is evidenced by the fact that there is no discussion of this objective in textbooks on the subject; for example, Fisher (1993).…”

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confidence: 99%

Fiscal Decentralization and Economic Growth

2001

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“…However it is argued that the expected benefits of decentralisation can only be realised when subnational governments have strong institutional capacity (Bird and Vaillancourt, 1998), with adequate autonomy and discretion in raising their own revenues (Bahl and Martinez-Vazquez, 2006). Fiscal decentralisation is critical to making sub-national governments autonomous and, as Davey (2003) suggests, it involves two interrelated issues: i) the division of spending responsibilities and revenue sources between national, regional and local governments and ii) the amount of discretion given to regional and local governments to determine their revenue and expenditure.…”

Section: Decentralisation and Local Financementioning

confidence: 99%