OECD Regional Development Working Papers

ISSN :
2073-7009 (en ligne)
DOI :
10.1787/20737009
Cacher / Voir l'abstract
Working papers from the Regional Development Policy Division of the OECD cover a full range of topics including regional statistics and analysis, urban governance and economics, rural governance and economics, and multi-level governance. Depending on the programme of work, the papers can cover specific topics such as regional innovation and networks, the determinants of regional growth or fiscal consolidation at the sub-national level.
 

Passing the Buck? Central and Sub-national Governments in Times of Fiscal Stress You or your institution have access to this content

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Auteur(s):
Rudiger Ahrend1, Marta Curto-Grau2, Camila Vammalle1
Author Affiliations
  • 1: OCDE, France

  • 2: Université de Barcelone, Espagne

Date de publication
26 mars 2013
Bibliographic information
No:
2013/05
Pages
34
DOI
10.1787/5k49df1kr95l-en

Cacher / Voir l'abstract

The paper explores interrelations between the fiscal situation of sub-national and central governments, or – put differently – whether and how sub-national and central governments contribute to each other’s fiscal difficulties. The first part of the paper examines sub-national government policies that may negatively affect the fiscal situation of the central government. Based on a new cross-country data-set at the level of individual regions, it examines structural factors that increase the probability of sub-national entities accumulating amounts of debt that may ultimately turn out to be unsustainable. The underlying idea is to explore to what degree such debt levels could result from moral hazard-driven behaviour at the regional level. The second part of the paper examines whether and how national governments hand the burden of fiscal adjustment down to sub-national levels, mainly looking at examples from the wave of fiscal adjustments in the wake of the 2007-09 global financial crisis.
Mots-clés:
sub-national government, public debt, bailouts, fiscal stress
Classification JEL:
  • H12: Public Economics / Structure and Scope of Government / Crisis Management
  • H70: Public Economics / State and Local Government; Intergovernmental Relations / General
  • H74: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Borrowing
  • H81: Public Economics / Miscellaneous Issues / Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts