Fiscal Federalism 2016

Making Decentralisation Work

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Fiscal Federalism 2016 surveys recent trends and policies in intergovernmental fiscal relations and sub-central government. Accessible and easy-to read chapters provide insight: into growing spending and tax devolution; the fiscal constitutions of federal countries; how immovable property taxation is regaining its former significance; on the true spending power of sub central governments; on the mix between own tax resources and intergovernmental grants; and on the role of fiscal rules and good budget frameworks for sustainable debt management at the state and local level.



A bird's eye view of fiscal decentralisation

This chapter offers a succinct overview of fiscal decentralisation in OECD countries and identifies common trends. To that end, it seeks to answer a few crucial questions. How does decentralisation evolve overall? Which countries have undertaken intergovernmental fiscal reforms, and which were the most common and important? What was the impact of the 2008 crisis on sub-central deficits and debt? How did sub-central power and responsibilities evolve in the aftermath of the crisis? Is there a “new normal” in intergovernmental fiscal relations and sub-national public finance, and what does it look like? To answer these questions, the chapter reviews the evolution of the main fiscal indicators, such as spending and revenue decentralisation, tax autonomy, the tax and spending composition of sub-central governments, the size and structure of the intergovernmental grant system, and deficit and debt developments at the sub-national level. Finally, the chapter looks beyond purely financial decentralisation indicators.



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