1887

OECD Working Papers on Fiscal Federalism

This series covers issues related to intergovernmental fiscal relations and local/regional public finance, such as: tax and spending assignment across government levels; intergovernmental grants; fiscal equalization; local and regional public service efficiency; inter-jurisdictional tax competition; and macroeconomic issues such as intergovernmental fiscal management and sub-central fiscal rules. Many of these working papers are outputs of the OECD Network on Fiscal Relations Across Levels of Government. Related working papers on fiscal federalism issues are also published in other OECD working paper series on tax policy, economics, public governance and regional development. An integrated list of key papers produced by the Fiscal Network can be found at http://oe.cd/fiscalnetwork.

(Note: numbers 1, 6 and 8 are available in the OECD Economics Department Working Papers, as numbers 465, 626 and 705.)

English

Market mechanisms in public service provision

This paper compares and analyses the use of market mechanisms in core sub-central policy areas, namely education, health care, transport, social protection, and environment. Arrangements like tendering, outsourcing, user choice and competition, user fees and performance-related funding can help to improve quality of service provision or lower its cost. With around 32% of total public expenditure and often wide-ranging spending powers, sub-central governments (SCG) have considerable leeway for improving their services by relying on market mechanisms. The decentralised and often fragmented nature of sub-central government poses some special challenges to efficient arrangements, however, and may require central government support or stronger inter-jurisdictional co-operation. And while market mechanisms are being harnessed ever more broadly, limits to a more extensive use have become apparent, particularly in the potential trade-off between greater efficiency and equity objectives, or between efficiency and sub-central accountability..

English

Keywords: Sub-central government, fiscal discipline, fiscal rules, indicators
JEL: H72: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Budget and Expenditures; H81: Public Economics / Miscellaneous Issues / Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts; C43: Mathematical and Quantitative Methods / Econometric and Statistical Methods: Special Topics / Index Numbers and Aggregation; leading indicators; H74: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Borrowing; D78: Microeconomics / Analysis of Collective Decision-Making / Positive Analysis of Policy Formulation and Implementation; H71: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Taxation, Subsidies, and Revenue
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error