Fiscal Transfers and Fiscal Sustainability

Potrafke, Niklas; Reischmann, Markus

doi:10.1111/jmcb.12231

Cited by 39 publications

(34 citation statements)

References 72 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Regarding the economic level of a region we have found no significant influence of GDP on the financial sustainability, although previous studies showed a positive relationship with the public revenues and could help local governments to reduce the debt [50][51][52][53]. This result could be due to an increase in GDP does not always imply an increase in the national taxes that local governments participate.…”

Section: Rq 2 -Does the Company's Concentration Affect The Financial contrasting

confidence: 44%

“…This partnership would promote public revenues [50] and decreased debt [51], which would cause a positive effect on the finances of local governments. In the same vein, Ghosh et al [52] and Potrafke and Reischmann [53] concluded that the economic level of a region is a key to analyze the financial viability of it, to the extent that it affects the ability of local governments to provide public services element and thus boosting the sustainability of regional development. It is, therefore, interesting to analyze the effect of changing the economic level of a territory on the financial sustainability of Local Governments.…”

Section: Research Questionsmentioning

confidence: 99%

See 1 more Smart Citation

Analyzing Forces to the Financial Contribution of Local Governments to Sustainable Development

et al. 2016

View full text Add to dashboard Cite

In many countries, the economic crisis brought high volumes of deficit and debt in public entities, which jeopardized the ability of governments to continue providing public services and caused considerable imbalances of economic growth in different regions. In this context, from the recognition of the linkage between economic development and efficiency in public management, previous research indicates that local governments are called to play a key role in promoting sustainable development through environment, economic and social policies based on financial sustainability of the public services. This paper aims to identify influencing factors on the financial sustainability of local governments, as an indicator of their capacity to maintain the delivery of public services over time. Based on a sample of 139 Spanish municipalities with large population for the period 2006-2014, our findings reveal the influence of variables such as the unemployment rate by sector, the dependent population, the immigrant population and the level of education of the population, on the financial sustainability in local governments, providing new useful knowledge to managers, policymakers, researchers and others stakeholders interested in the sustainability of public services.

show abstract

Section: Rq 2 -Does the Company's Concentration Affect The Financial contrasting

confidence: 44%

Section: Research Questionsmentioning

confidence: 99%

Analyzing Forces to the Financial Contribution of Local Governments to Sustainable Development

et al. 2016

View full text Add to dashboard Cite

show abstract

“…In contrast, those of the German case are negative and significant at the 1% degree of economic growth in the long run, although the rules are not stringent in the short run, as stated in Poterba (1996) and Potrafke and Reischmann (2015).…”

Section: Panel Cointegrating Vector Estimationsmentioning

confidence: 80%

“…As documented in Potrafke and Reischmann (2015), although intergovernmental fiscal transfers are implemented to fund the budgets of state and local governments in the federal systems of both the United States and Germany, a key difference in fiscal transfer systems exists between the two countries. In the United States, the transfer payments are only vertical, and the federal government transfers to the states.…”

Section: Panel Cointegration Analysis Of Wagner's Law For Us and Gementioning

confidence: 99%

“…See, for example, Peacock and Scott (2000) and Durevall and Henrekson (2011) for extensive surveys of the literature. Bordo et al (2013) and Potrafke and Reischmann (2015). In U.S. states, in addition to a high degree of expenditure decentralization, tax bases and rates are determined with discretionary powers, and fiscal sovereignty is established.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Wagner’s law, fiscal discipline, and intergovernmental transfer: empirical evidence at the US and German state levels

Funashima

Hiraga

2017

Int Tax Public Finance

View full text Add to dashboard Cite

Does fiscal discipline restrain government from increasing its budget size? To answer this question, this paper investigates whether Wagner's law is satisfied for two types of states: U.S. states, in which fiscal sovereignty is established, and German states, in which fiscal transfer dependence is high and budget constraints are softened. In U.S. states, we demonstrate that Wagner's law is validated, while some of the balanced budget requirements weaken the validity of the law. In German states, we find an "inverse" law, especially after the bailouts of Bremen and Saarland. The "inverse" law is a new channel of growth in government size, and means that soft budget constraints cause significant negative correlation between government size and output. These results are robust regardless of whether intergovernmental fiscal transfers are taken into account, while they quantitatively change the validity of the law.Our findings imply that the characteristics of fiscal discipline are prime determinants of the channel and degree of growth in government size. JEL Classification Codes: H72, C23

show abstract

Determinants of the degree of fiscal sustainability

Afonso,

Alves,

Coelho

2024

Int. J Fin Econ

View full text Add to dashboard Cite

We assess the link between fiscal sustainability coefficients, namely the responses of the primary government balance and the global government balance to the debt‐to‐GDP ratio, and the response of government revenues to government expenditures. For 22 OECD developed countries we use annual data between 1950 and 2019. Other determinants of fiscal responses are also studied in the context of quantile regressions. We find that the output gap contributes to increasing fiscal sustainability by positively influencing the responsiveness of the primary and global government balances; and the responses of the primary and global government balances to the debt ratio and the response of government revenues to government expenditures depend on the level of the debt ratio. In addition, from the quantile analysis, the influence of the response of government revenues to government expenditures is negative and increasing over the deciles, confirming the existence of a negative cross‐relationship between the fiscal sustainability coefficients.

show abstract

Fiscal Transfers and Fiscal Sustainability

Cited by 39 publications

References 72 publications

Analyzing Forces to the Financial Contribution of Local Governments to Sustainable Development

Analyzing Forces to the Financial Contribution of Local Governments to Sustainable Development

Wagner’s law, fiscal discipline, and intergovernmental transfer: empirical evidence at the US and German state levels

Determinants of the degree of fiscal sustainability

Contact Info

Product

Resources

About