Institutional and Financial Relations across Levels of Government

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As financial markets put more and more pressure on governments to reduce their deficits and debts, sub-central levels of government are a key player in the implementation of national strategies. The room for manoeuvre to implement consolidations strategies coordinated across levels of government highly depends on the institutional structure of intergovernmental relations, and the effectiveness of their multi-level governance structure. This was already the case for recovery strategies, in the beginning of the crisis. This report provides an overview of the institutional and financial relations across levels of government that enables policymakers evaluate their position and identify good practices for mobilizing sub-central governments for national growth, equity and stability objectives. This report is divided into two parts: the first part is analytical and the second part provides institutional and quantitative country information and comparisons.



Financial resources, expenditures and debt of sub-central governments

The design of intergovernmental fiscal relations varies widely across countries, as they necessarily incorporate local economic, but also political, social and cultural factors. This chapter aims to give some insight to policy makers about the relative importance in OECD member countries of sub-central governments (SCGs) in different policy fields, the spending responsibilities of sub-central governments, and the composition and autonomy of the revenues of sub-central governments with which they must finance these expenditures. This chapter draws on data from the OECD Fiscal Decentralisation Database, a new database developed by the OECD Network on Fiscal Relations across Levels of Government, based on information provided by the OECD National Accounts and OECD Revenue Statistics. The first section focuses on the spending responsibilities and weight of sub-central governments. The second section analyses sub-central governments’ own revenues, such as taxes and user fees. The third section looks at the grants in sub-central governments’ revenues and, finally, the fourth section deals with sub-central government debt.


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