Sub-national insolvency frameworks stipulate rules and procedures to resolve sub-national debt in a prompt and orderly way. As such they may serve to facilitate debt restructuring and the fiscal recovery of sub-national entities. They may even...

Performance systems are one tool available to central governments to improve the performance of sub-national service delivery. This paper provides a preliminary review of suitable metrics and mechanisms to reliably measure and monitor the efficiency...

Globalisation accompanied by the growing importance of information technology and knowledge-based production pose challenging problems for federations. We summarise the difficulties that traditional decentralised federations face in addressing...

This paper provides an update of the indicators that measure the tax autonomy of sub-central governments in OECD countries. Over the last decade, tax autonomy at the state level increased, while it hardly changed at the local level. The OECD now has...

This paper addresses the following questions about immovable property taxation in OECD and partner countries: What is valued? How is it valued? And who values? It draws on published information and data on property tax policy and administration in...

Property taxes are generally considered by economists to be good taxes, and many countries are being advised to increase and improve their property taxes. In practice, however, property tax reforms have often proved to be difficult to carry out...

This paper reviews the literature and policy discussions about the role of the property tax for land use. Various externalities of the development of land, such as new infrastructure needs, the loss of open space or air pollution due to longer...

Theories of fiscal competition between jurisdictions suggest that investment in productive relative to consumptive spending is higher in a decentralised setting, and that efficiency of the public sector is also higher. This paper empirically analyses...

This paper analyses the relationship between fiscal decentralisation and economic activity. Like other institutional arrangements, fiscal decentralisation affects firms, households and public entities, and the way they save, invest, spend or...

Intergovernmental fiscal frameworks usually reflect fundamental societal choices and history and are not foremost geared towards achieving economic policy objectives. Yet, like most institutional arrangements, fiscal relations affect the behaviour of...

Tax competition is the strategic interaction of tax policy between sub-central governments (SCG) with the objective to attract and retain mobile tax bases. Tax competition rests on firms’ and households’ willingness and ability to shift the tax base...

The world is recovering from the worst economic and financial crisis since the Great Depression. The recovery will probably be shallow and government deficits could remain very large over the next few years in a number of countries. The crisis has a...

Normative principles provide a relatively clear set of rules for the balance between grants and taxes (box 1 reviews the normative theory), but in practice a variety of types of tax-grant systems are observed in OECD countries, which do not all...

Tax sharing and intergovernmental grants are two sub-central funding arrangements that are often difficult to disentangle. The dividing line is not drawn uniformly across OECD countries or across time, and rules established in National Accounts,...

This paper describes the progress that has been made since 2006 in establishing statistical databases on tax autonomy and intergovernmental grants, aiming to better understand sub-central finance and intergovernmental fiscal relations. The paper is...

This paper analyses trends and driving forces in the revenue composition of sub-central government (SCG). Between 1995 and 2005 the share of SCG in total government spending increased significantly from 31 to 33 percent while the SCG tax share...

On average, one-third of public expenditures in OECD countries occur at the sub-central level, a figure that has risen slightly over time. This is due, in part, to the decentralisation of competences for public services in many OECD countries. Not...

Fiscal equalisation is a transfer of fiscal resources across jurisdictions with the aim of offsetting differences in revenue raising capacity or public service cost. Its principal objective is to allow sub-central governments to provide their...

Intergovernmental grants are used in many countries to finance sub-national spending and to implement national policies. However, the governance of grants is complex, and practices vary widely across OECD countries. The aim of this article is to...

State and local governments in OECD countries have access to a variety of fiscal resources. Discretion over these resources varies considerably, and so does sub-central governments’ power to shape public service delivery. The design of fiscal...