Grants structure in an intergovernmental fiscal game

Snoddon, Tracy; Wen, Jean‐François

doi:10.1007/s101010200050

Cited by 7 publications

(4 citation statements)

References 10 publications

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“…Inefficiencies may arise due to local politicians' rent-seeking behaviour or by their capture by local lobbies (Bardhan, 2002), although rent seeking may be limited by yardstick competition and mobility (Besley and Case, 1995). Therefore, the comparative advantages of decentralization depend on the information the agents possess; for instance, about specific parameters (Levaggi and Smith, 1994;Snoddon and Wen, 2003;Akai and Mikami, 2006;Levaggi and Levaggi, 2016). Finally, the demand for decentralization may itself depend on the choice of the instruments the regulator is using to reduce horizontal fiscal imbalance (Levaggi and Menoncin, 2017).…”

Section: Second-generation Fiscal Federalismmentioning

confidence: 99%

“…Grants, besides providing sufficient financial means, may be used to align incentives between central and decentralized governments. Snoddon and Wen (2003) investigate the optimal grant structure in a context of strategic interdependence of central government's choice of grants and local governments' responses. In addition, Huber and Runkel (2008) and Martell and Smith (2004) analyse the interaction between central government grants and debt policy, showing that under certain circumstances transfers can limit local government debt.…”

Section: The Problems Of Healthcare Decentralizationmentioning

confidence: 99%

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Efficiency and equity effects of healthcare decentralization: evidence from Italy

Ferrario¹,

Levaggi²,

Piacenza³

2023

Handbook on the Political Economy of Health Systems

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Section: Second-generation Fiscal Federalismmentioning

confidence: 99%

Section: The Problems Of Healthcare Decentralizationmentioning

confidence: 99%

Efficiency and equity effects of healthcare decentralization: evidence from Italy

Ferrario¹,

Levaggi²,

Piacenza³

2023

Handbook on the Political Economy of Health Systems

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“…As Dahlby () has discussed, conditional matching grants are relevant for correcting fiscal spillovers among provinces. Snoddon and Wen () provide a theoretical characterization of the different types of grants as the outcome of a non‐cooperative game among the federal government and the provinces. Bucovetsky et al.…”

Section: Intergovernmental Transfersmentioning

confidence: 99%

The impressive contribution of Canadian economists to fiscal federalism theory and policy

Boadway

Cuff

2017

Canadian J of Economics

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The study of fiscal federalism has been central to the research of Canadian economists since the Rowell–Sirois Report. To mark the 50th anniversary of the founding of the Canadian Economics Association, it is fitting to take stock of their contributions. We focus on the period since 1982 and emphasize the main scholarly publications of an inclusive array of Canadian economists and economists in Canadian universities. Our attention is devoted to applications in the context of federal and provincial governments, setting aside related issues in municipal government finance. We briefly discuss instances where the fiscal federalism literature has informed policy debates including through policy research institutes, government commissions and international organizations.

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“…Production should be assigned to the tier which is better informed on local preferences, while Central Government (CG) may use grants for equity and efficiency reasons. Second generation models 4 suggest that the success of fiscal federalism depends on the information the agents possess about specific parameters (Akai and Mikami 2006 ; Levaggi 2002 ; Wildasin 2004 ; Snoddon and Wen 2003 ) and on the level of coordination in the actions of the different agents (Besley and Coate 2003 ; Köthenbürger 2008 ; Petretto 2000 ; Ogawa and Wildasin 2009 ). Both issues have been widely studied by the literature, which shows the existence of a trade-off between autonomy and control.…”

Section: Introductionmentioning

confidence: 99%

Devolution and grant-in-aid design for the provision of impure public goods

Levaggi

2016

SpringerPlus

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Traditional fiscal federalism theory postulates that devolution for the provision of local public goods increases welfare. However, most of the services offered at local level are local impure public goods whose characteristics may prevent devolution from being efficient. Our paper shows that devolution is the optimal choice only for local impure public goods. For an environment characterised by coordination and asymmetry of information problems, we propose the optimal grants-in-aid formula that Central Government should use to reduce welfare losses and we compare it with what suggested by the mainstream literature. Finally, we show under which conditions devolution should be preferred to a centralised solution. From a policy point of view, our paper may explain the heterogeneity in the choices made by countries in terms of devolution in the provision of merit and impure public goods.

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Grants structure in an intergovernmental fiscal game

Cited by 7 publications

References 10 publications

Efficiency and equity effects of healthcare decentralization: evidence from Italy

Efficiency and equity effects of healthcare decentralization: evidence from Italy

The impressive contribution of Canadian economists to fiscal federalism theory and policy

Devolution and grant-in-aid design for the provision of impure public goods

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