Fiscal federalism and decentralization

Top PDF Fiscal federalism and decentralization:

"Fiscal federalism and political decentralization  Lessons from Spain, Germany and Canada" de Núria Bosch y José M  Durán (eds ) [Reseña de libro]

"Fiscal federalism and political decentralization Lessons from Spain, Germany and Canada" de Núria Bosch y José M Durán (eds ) [Reseña de libro]

Por lo que concierne al problema de la asignación de tributos a los niveles subcen- trales de gobierno, creo que debe subrayarse el acierto de la fórmula de cesión de tri- butos a las comunidades autónomas, tal y como está configurada actualmente. Por un lado, este instrumento asegura el mantenimiento de una regulación armónica de los elementos esenciales de los tributos en todo el territorio (de régimen común), lo que disminuye los costes de administración y cumplimiento y las distorsiones en el com- portamiento de los agentes económicos. Por otro lado, esta fórmula permite a las co- munidades autónomas intervenir en la determinación de los tipos de gravamen y en la gestión de buena parte de estos tributos, lo que garantiza el ejercicio de la autonomía financiera, el cumplimiento del principio de responsabilidad fiscal y la realización por las comunidades autónomas de su propia política tributaria. Por estas razones, en mi opinión, el mecanismo español de cesión de tributos aventaja con claridad al sis- tema alemán de participación de los länder en los grandes tributos del sistema fiscal (IRPF, Impuesto sobre Sociedades e IVA), que no lleva aparejada la atribución de competencias normativas, pero también al sistema canadiense de amplísima descen- tralización tributaria. En buena medida, los acuerdos de coordinación fiscal entre la federación y las provincias canadienses, que se traducen en la aplicación de bases im- ponibles comunes en la imposición sobre la renta y sobre las ventas, representan el reconocimiento fáctico de la superioridad de un sistema como el de tributos cedidos. Tanto las comunidades autónomas como el nivel central deben aprender bien esta lec- ción y dominar la tentación de sustituir una figura que está funcionando adecuada- mente por otras que ya han mostrado que ocasionan más inconvenientes.
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The long and winding road towards fiscal decentralization

The long and winding road towards fiscal decentralization

Another topic often addressed by fiscal federalism literature is that of intergovernmental grants, since they may serve different policy objectives. Gordon (1983), Feldstein (1975) and Inman and Rubinfeld (1979) discuss several aspects of intergovernmental transfers: whether they may serve the purpose of correcting distortions, equalizing taxable capacity and transferring income from richer to poorer areas. Bradford and Oates (1971) state a prescriptive theory of intergovernmental grants where benefit spillovers across jurisdictions, revenue sharing and income redistribution are taken into account. McKinnon (1997) explores the relationship between decentralization and a growing economy and the importance of having subnational governments facing hard budget constraints and full separation of monetary and fiscal powers. As McKinnon states, a hard budget constraint means that lower level of governments must rely in their own sources of revenues in order to finance their expenditures.
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The dilemma of fiscal federalism: grants and fiscal performance around the world

The dilemma of fiscal federalism: grants and fiscal performance around the world

A rapid growth in the autonomy and responsibilities of state and local governments is one of the most noteworthy trends in governance around the world in recent decades. This trend, along with the growing autonomy of supra-national bodies like the European Union, has encouraged analysts to reexamine some basic issues facing multi-tiered systems of government. As experiences with federalism unfold, an abstract welfare economics literature emphasizing its efficiency advantages has given way to a more balanced political economy literature that draws attention to questions of institutional design. Much of this new literature points out that decentralization can be dangerous, especially in developing countries. Above all, skeptics point out the difficulties of macroeconomic management, adjustment, and reform in decentralized systems (Litvack et al. 1998, Prud'homme 1995, Tanzi 1995) especially when they feature formally federal constitutions that effectively empower states with veto authority over certain central government decisions (Treisman 1999, Wibbels 2000).
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Presentation of our number 10 issue: "In the bowels of war: Migrations, refugees and forced displacement"

Presentation of our number 10 issue: "In the bowels of war: Migrations, refugees and forced displacement"

Changing section we are fortunate to share the interview made to Professor Dr. Ivonne Suárez of the School of History at the Industrial University of Santander (Universidad Industrial de Santander-Bucaramanga). She, as an academic authority in the field of research on historical memory, currently directs the Victim's Oral Memory Archives (Archivo de la Memoria Oral de Víctimas, AMOVI) and is director of the research group History, Archivistics and Research Networks (Historia, Archivística, y Redes de Investigación, HARED) as well as the journal Cambios & Permanencias (Changes & Permanence). Moreover, among her research credentials, she holds a postdoctoral degree in Social Networks by the Universite Toulouse Le Mirail (France). So we celebrate to have, in the present edition of nuestrAmérica journal, the interpretation of an expert on the theme proposed: Forced displacement in Colombia and its struggle for Memory. Indeed, with her contribution, the reader may have more elements of analysis to discuss a social phenomenon that, in the opinion of the Colombian historian, seems to transcend the analysis of Migration proposed by international organizations.
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Essays on Education Decentralization

Essays on Education Decentralization

programme is the chosen avenue into university for most students, and that the attractiveness of vocational education in Spain is much lower than that of this general programme, differences in the effects of decentralization on educational outcomes in the general and the vocational programmes might reflect a better match between population preferences and educational policies consequent upon decentralization. Within a context where the resources were scarce and subnational governments had not been granted powers to raise their own revenues, regional governments might have concentrated their efforts and resources on improving the outcomes in the general programme. To conduct the analysis, we constructed a panel data set containing information on the 50 provinces of Spain for the period 1977-1991, a period that includes the years before and after the education decentralization reform of the eighties. The reason to focus our study on this period is that a reform of the educational system that extended compulsory education from the age of 14 until the age of 16 was implemented at the same time that decentralization at the end of the nineties. In addition, during the nineties there was also a reform of the regional funding system, which implied a significant increase in the degree of taxing autonomy of regional governments (Bosch and Duran, 2005). As a consequence, it is difficult to disentangle the effects of the education decentralization reform during the nineties from the effects of the education and the funding system reforms.
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Evaluating the impact of school decentralization on education quality

Evaluating the impact of school decentralization on education quality

The discussion so far involves a stylized description of the world, wherein causal effects are the same for every unit (province). However, the theory of decentralization highlights several channels through which decentralization may differently affect outcomes. Decentralization effects may depend on the technical capabilities of local governments, the risks of capture by local elites, or the significance of agency costs. Thus, our estimate of α may be subsuming positives as well as negatives impacts of school decentralization on test outcomes. This may not only obscure the existence of heterogeneous impacts on test outcomes but also impede us to learn about the channels through which decentralization operates. To investigate this heterogeneity of program impact, we postulate the following model that encompasses model (6):
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Decentralization and local government performance improving public service provision in Bolivia.

Decentralization and local government performance improving public service provision in Bolivia.

Encontramos fuerte evidencia de que la devolución de recursos y poderes a los gobiernos locales han (i) incrementado en la eficiencia de asignación en el sector público boliviano, (i[r]

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Rethinking SoveReignty. independence-lite, devolution-max and national accommodation

Rethinking SoveReignty. independence-lite, devolution-max and national accommodation

taxes and pass on a share to the centre for common functions. The concierto exists for historic reasons in the Basque Country and Nav- arre, where it was introduced in the nineteenth century after the abolition of the old foral system, conditions which do not exist else- where, but the principle has been carried over to the Catalan pro- posal for a ‘fiscal pact’ and Scottish proposals for ‘full fiscal auton- omy’. In practice, the Basque system is constrained in a number of ways. Social security contributions are not included. Value Added Tax is harmonized with Spain as variation is not allowed within a single state according to EU rules. The overall tax burden has to be similar to that elsewhere in Spain; and there are agreements about debts and deficits required to meet European monetary rules. This leaves the Basque provinces with leeway over the marginal corpora- tion and income tax rates, excise duties and, crucially, allowances. The Ibarretxe Plan proposed to include the social security contribu- tions and the CiU and Esquerra proposals essentially follow this. Reform Scotland’s proposals are less radical, leaving VAT and social security contributions to Westminster. The Parti Québécois would take all taxation power to Quebec, while the Allaire Plan appears to leave each level to raise the taxes required for its own purposes, although the details are not clear.
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Institutional perspectives on democracy and federalism : some comments on Argentina and Australia

Institutional perspectives on democracy and federalism : some comments on Argentina and Australia

Until 1890 Argentina maintained a balance of power between the different levels of government and factions, and the practices of restrictive electoral participation and federal intervention were usual. The federal government and the provinces had their own sources of revenue, taxes on foreign trade the former and internal taxes, the latter. During the mid-1880s, sub-national states increased their public debts and many provincial banks issued new paper-money. The inevitable 1890 crisis changed the relation between the two levels of government with respect to taxation. The resources of the national government were affected by the balance of payment crisis, the lack of foreign credit. Besides that, the national government bailed out the provinces by assuming many of their debts. Under these circumstances, the local governments lost control over some internal taxes in favor of the center, as the Supreme Court made a broad interpretation of the Constitution. “Both levels of government collecting taxes over the same taxpayers proved to be an inefficient game” 33 .
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U S  Federalism and Spanish Autonomy   Lessons from U S  Federalism for the External Activities of Substate Entities

U S Federalism and Spanish Autonomy Lessons from U S Federalism for the External Activities of Substate Entities

comments that "constitutional jurisprudence' s creative force derives from the binding force of its conclusions; not only its concrete decision concerning whether t[r]

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Canadian Federalism, Human Rights and the Protection of Minnorities

Canadian Federalism, Human Rights and the Protection of Minnorities

when Europeans arrived in North America, aboriginal peoples were already here, living in communities on the land, and participating in distinctive cultures, as they had done for centuries. It is this fact, and this fact above all others, which separates aboriginal peoples from all other minority groups in Canadian society and which mandates their special legal, and now constitutional, status.”

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Federal institutions and multinational investors : federalism, government credibility and foreign direct investment / Nathan Jensen, Fiona McGillivray

Federal institutions and multinational investors : federalism, government credibility and foreign direct investment / Nathan Jensen, Fiona McGillivray

Next we take a step backwards to consider whether competition between states to secure FDI increases the incentives to renege on FDI contracts. At the international level there is competition between countries to attract FDI. Some argue that in federal systems, this competition is magnified by inter- nal competition. 23 Suppose, as in the earlier example, a foreign investor wants access to a large federal market. It can locate in state A, B, or C. States compete to offer the most attractive entry deals. Suppose that, within a particular industry, state A would be the most profitable site for invest- ment. Nevertheless, states B and C will be ever willing to strike a deal to attract this profitable foreign investment. For example, state B might be pre- pared to offer favorable tax rates if the industry chooses to locate there. Indeed, we might imagine a bidding war between states to attract a potential investor. At each bidding round, host states surrender a greater share of their potential profits to the investor. In such a bidding war, state A would win, since its natural advantage allows it to offer greater concessions. Unfortunately, as host, state A would be left with few, if any, of the profits. Comparative advantage continues to dominate in the location of invest- ment, but the race to the bottom prevents hosts from sharing in the rewards. This increases the likelihood that the state will default on the deal after the foreign investment has been made.
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Partial decentralization as a safeguard against favoritism

Partial decentralization as a safeguard against favoritism

The approach adopted in this paper steps on the seminal papers by Barro (1973) and Ferejohn (1986). These authors propose a principal - agent relationship between politicians and citizens, focusing on moral hazard problems in government. Seabright (1996) uses the main features of Ferejohn’s model to analyze the appropriate level of decentralization of a local policy variable. Besides the reduced pivot probability effect, the author stresses a rent-scale effect of centralization that gathers the idea that central government may have more benefits from reelection than local governments. Hindriks and Lockwood (2004) add an adverse selection problem in a fiscal decentralization model, showing that decentralizing fiscal policy may increase the probability of firing bad incum- bents. This paper abstracts from adverse selection issues. Selection effects of re-election would provide interesting insights but a pure moral hazard setting illustrates the point on partial decentralization and favoritism. My model departs from Seabright’s in the issues arising from the multitask nature. In particular, multitask allows us to analyze a two-tier institutional setting - partial decentralization. This regime is not possible with Seabright’s nor Hindriks and Lockwood’s models.
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Tribunal Supremo y cambios en el federalismo de Estados Unidos

Tribunal Supremo y cambios en el federalismo de Estados Unidos

25 469 US 528 (1985). El juez Blackmun sostiene que no es posible determinar cuáles son las actividades exclusivas de los estados sobre las que el Congreso no puede entrar a legislar. Lo más destacado de esta sentencia es que considera que los estados ya participan en el proceso decisorio en el plano federal con lo que ya queda garantizada la presencia de los intereses esta- tales en dicho plano. A esto sirve precisamente el Federalismo. De este modo, el Tribunal hacía suya la doctrina Weschler-Choper, cuyos autores en sendos artículos ya clásicos de 1954 (H. WESCHLER, «The political safeguards of Federalism», Columbia Law Review, núm. 54, pág. 543 ss) y 1980 (H. CHOPER, Judicial Review and the National Political Process, University of Chicago Press, Chicago) habían sostenido que la delimitación competencial entre la Federación y los es- tados debe corresponder al Congreso y al Presidente, y no a los tribunales de justicia federales o estatales. Para dichos autores, en la medida en que los estados ya participan en la adopción de decisiones federales en el seno de las instituciones federales, particularmente en el senado, no se necesita la protección judicial de los intereses y las competencias estatales.
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La estructura federal del gobierno en México y sus perspectivas

La estructura federal del gobierno en México y sus perspectivas

mente buscar la forma de fortalecer la autonomía de los estados miembros. Sobre en que tipo de Federalismo se enmarca el Estado Federal Me-. xicano, este se puede ubicar en el Federalism[r]

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Goals of the Constitution

Goals of the Constitution

On September 17, 1787, the delegates to the Constitutional Convention signed the docu- ment. When it came Benjamin Franklin’s turn to sign, the elderly leader had to be helped for- ward in order to write his name on the parch- ment. Tears streamed down his face as he signed. He looked at the carving of the sun on the back of George Washington’s chair. “I have often looked at that sun behind the president of the convention without being able to tell whether it was rising or setting,” he said, “but now, I have the happiness to know that it is a ris- ing and not a setting sun.”

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Inter-budget relations as a form of federalism

Inter-budget relations as a form of federalism

A special stage and a new concept of development of intergovernmental fiscal relations are associated with the Decree of the President of the Russian Federation of January 16, 2017 № 13 “On Approval of the Fundamentals of State Policy of Regional Development of the Russian Federation for the period up to 2025”, which defines the principles, objectives, priorities and mechanisms of implementation of the state policy of regional development of the Russian Federation (Evdokimov, 2007; Waldhoff, 2015; Blankenagel, 2015). Its implementation involves changes in the legal regulation of budgetary relations on the basis of the development and implementation of a new holistic model of budgetary federalism, taking into account the specifics of different types of subjects of the Russian Federation. Many positive transformations in the legal regulation of inter-budgetary relations that have occurred since the adoption of the Budget Code of the Russian Federation have not been able to ensure an optimal balance of interests of the Russian Federation and its constituent entities, to eliminate significant differences both in the level of socio-economic development of the constituent entities of the Russian Federation, where the differentiation in terms of regional budget revenues is 43 times, and in the average per capita income of the population - a difference of 5.5 times.
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State of emergency over coronavirus in Colombia: Between harmonious collaboration and decentralization

State of emergency over coronavirus in Colombia: Between harmonious collaboration and decentralization

The World Health Organization declared Coronavirus a Public Health Emergency of International Importance, fur- ther claiming that it transcends geographical boundaries through person-to-person transmission between infected travelers. President Iván Duque faced this contingency, through 12 presidential decrees that he issued days after of the first case of Coronavirus in Colombia. However, the declaration of a state of emergency and the presidential mandates on public order, came into conflict with previously issued departmental and municipal decrees. To settle this conflict, this article is the product of a qualitative investigation that makes a systemic interpretation of the 12 presidential decrees, in order to verify the compliance with the principle of legality of presidential powers and the legal framework of states of emergency. For this purpose, the method of legal hermeneutics was applied with the documentary analysis technique. This investigation evidenced that the presidential decrees promoted the harmo- nious collaboration between all levels of government (municipal, departmental and national), and concluded that this presidential power has been essential to face the Coronavirus contingency, in the absence of actions by the legislative and judicial.
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Decentralization and Access to Social Services in Colombia

Decentralization and Access to Social Services in Colombia

It is notable that for both sectors, increasing access is not a simple question of providing more resources. The coefficient on per capita expenditures is negative for education and essentially zero for health. Throwing money at the problem of access does not solve it. It is, rather, how the money is spent and by whom that seems to matter – the quality, and not quantity, of public expenditure. Our theoretical results shed additional light on this question. The typical dynamic in a decentralized system is that central government announces nationwide policies and programs, and the budget allocations these entail. Local government observes these and then chooses how to allocate its own resources locally. Our model implies that elected local governments that are better informed about local needs and preferences will concentrate their resources in the areas their voters care about most.
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Decentralization, corruption, and political accountability in developing countries

Decentralization, corruption, and political accountability in developing countries

With the exception of θ , the other two parameters of the model (S and β ) affect the level of accountability only through their effect on H. Thus, for a clearer intuition of statements (b), (c) and (d) in proposition 4, let us analyze the elite’s contribution to decrease the efficiency of the accountability sector. From equation 4, there are two forces affecting H as either S, or θ , or β change. One is the direct effect and the other is the effect through r - more specifically through the term Ψ (.) r . Notice that this ratio can be interpreted as the moral hazard probability per unit of corruption. It is easy to show that, keeping constant y and so τ , Ψ (.) r strictly increases in r. Therefore, when this ratio goes up (i.e. r increases) the elite will be willing to raise H in order to compensate the increment in the detection probability. The final effect over H will depend on the combination of the direct effect and the effect through Ψ (.) r .
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