Institutions of Intergovernmental Fiscal Relations

Challenges Ahead

image of Institutions of Intergovernmental Fiscal Relations

Intergovernmental fiscal institutions are the overarching framework for relations across government levels. They comprise the constitutional set up of a country; the division of power between government levels; the prevalence of fiscal rules across government levels; intergovernmental budget frameworks; the role of independent bodies such as fiscal councils in shaping fiscal relations; the inter-ministerial organisation of fiscal decision making; and other framework conditions shaping intergovernmental fiscal relations and fiscal policy. This book brings together academics and practitioners dealing with or being involved in shaping the institutions of intergovernmental fiscal relations. It has an interdisciplinary focus and provides insight from various academic or practitioners’ fields: economists, political scientists, budget management specialists and others.



Intergovernmental co-ordination of fiscal policy in Switzerland

This chapter describes fiscal co-operation institutions in Switzerland, which go beyond traditional vertical top-down co-ordination. Switzerland is an example of intergovernmental co-ordination of fiscal policy in a highly decentralised country. The country is characterised by a highly fragmented structure of sub-national entities. The cantons (state level) have significant policy, organisational and financial autonomy. Due to the fragmented structure and considerable autonomy, vertical co-operation between the federal and cantonal levels as well as between the cantonal and municipal levels is indispensable. This co-operation is based on the following elements: independent financing of cantonal tasks, fiscal equalisation between financially strong and weak cantons, as well as fiscal assistance between the federal and cantonal levels. In this respect, the role of vertical co-ordination of stabilisation policy and particularly of debt policy is limited. Horizontal co-operation is based mainly on inter-cantonal agreements and conferences.


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