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Intergovernmental Transfers in Federations
Intergovernmental Transfers in Federations presents a synthesis of international experience of large federations in the most recent times in addressing the most fundamental issue of horizontal and vertical imbalances in their countries through the prism of intergovernmental transfers. Contributors delve into the various aspects of policy making as well as policy choices in selecting an efficiency path for a meaningful fiscal devolution aimed at integrating performance and incentives to reach an expenditure mix that facilitates better service delivery.
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Critical Acclaim
Contributors
Contents
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In a multi-level government system institutional legacy and the assignment of roles and responsibilities between the federal and the subnational governments create imbalances. These imbalances in economic terms are a result of a mismatch between revenue-raising capacity and the spending responsibilities of the different levels of the government.
Intergovernmental Transfers in Federations presents a synthesis of recent international experience of large federations in addressing the most fundamental issues of horizontal and vertical imbalances through the prism of intergovernmental transfers. It compares mature federal systems and the maturing federations of the world. Contributors delve into the various aspects of policymaking as well as policy choices in selecting an efficiency path for a meaningful fiscal devolution aimed at integrating performance and incentives to reach an expenditure mix that facilitates better service delivery. Chapters include empirical, theoretical and methodological contributions as well as case studies that illustrate important policy or methodological lessons for future work.
This collection is essential reading for researchers, practitioners, policy makers and students wishing to understand the choices made by different countries in response to the overarching principles of needs, equity and efficiency for sharing of resources.
Intergovernmental Transfers in Federations presents a synthesis of recent international experience of large federations in addressing the most fundamental issues of horizontal and vertical imbalances through the prism of intergovernmental transfers. It compares mature federal systems and the maturing federations of the world. Contributors delve into the various aspects of policymaking as well as policy choices in selecting an efficiency path for a meaningful fiscal devolution aimed at integrating performance and incentives to reach an expenditure mix that facilitates better service delivery. Chapters include empirical, theoretical and methodological contributions as well as case studies that illustrate important policy or methodological lessons for future work.
This collection is essential reading for researchers, practitioners, policy makers and students wishing to understand the choices made by different countries in response to the overarching principles of needs, equity and efficiency for sharing of resources.
Critical Acclaim
‘The edited volume Intergovernmental Transfers in Federations presents a comprehensive collection of essays introducing academics to the multifarious ways of handling vertical and horizontal fiscal imbalances in federal systems. The various contributions provide valuable insights into issues concerning intergovernmental transfers and are beneficial for everyone interested in one or more of the countries considered. The book is an outstanding scholarly account of fiscal federalism.’
– Andreas Pehr, Publius: The Journal of Federalism
‘Scholars and practitioners alike will find this comprehensive volume invaluable. The analytical framework and the accompanying country case studies provide constructive insights and lessons on how to successfully design and implement intergovernmental transfers within federal countries. Definitely a book that will help shape future central-local fiscal systems.’
– Roy Kelly, Duke University, US
‘This excellent volume brings together most of the world’s leading experts on intergovernmental fiscal relations. They provide important contributions to both the conceptual and practical literature on the design of intergovernmental transfers. Building on three insightful discussions of the principles of effective transfer design, the volume contains a dozen in-depth descriptions and critical analyses of grant systems in mature federations, evolving federations, and multi-level unitary governments. Policymakers, scholars, and students will all profit from the lessons about the design of intergovernmental transfers provided in this timely volume.’
– Andrew Reschovsky, University of Wisconsin–Madison, US
‘When it comes to designing intergovernmental transfers in a federation, there is no one model that stands above the rest. This book clearly illustrates this point with case studies from ten mature and maturing federations, written by leading scholars. Even though transfers differ across countries, there are important lessons to be learned from these case studies. For policymakers, researchers, and practitioners interested in understanding the theoretical considerations in designing transfers, what works and what does not work, and how to design a better system, this book is essential reading.’
– Enid Slack, University of Toronto, Canada
– Andreas Pehr, Publius: The Journal of Federalism
‘Scholars and practitioners alike will find this comprehensive volume invaluable. The analytical framework and the accompanying country case studies provide constructive insights and lessons on how to successfully design and implement intergovernmental transfers within federal countries. Definitely a book that will help shape future central-local fiscal systems.’
– Roy Kelly, Duke University, US
‘This excellent volume brings together most of the world’s leading experts on intergovernmental fiscal relations. They provide important contributions to both the conceptual and practical literature on the design of intergovernmental transfers. Building on three insightful discussions of the principles of effective transfer design, the volume contains a dozen in-depth descriptions and critical analyses of grant systems in mature federations, evolving federations, and multi-level unitary governments. Policymakers, scholars, and students will all profit from the lessons about the design of intergovernmental transfers provided in this timely volume.’
– Andrew Reschovsky, University of Wisconsin–Madison, US
‘When it comes to designing intergovernmental transfers in a federation, there is no one model that stands above the rest. This book clearly illustrates this point with case studies from ten mature and maturing federations, written by leading scholars. Even though transfers differ across countries, there are important lessons to be learned from these case studies. For policymakers, researchers, and practitioners interested in understanding the theoretical considerations in designing transfers, what works and what does not work, and how to design a better system, this book is essential reading.’
– Enid Slack, University of Toronto, Canada
Contributors
Contributors: R.W. Bahl Jr., J. Boex, H.A. Chernick, J. Coppel, B. Dafflon, J. Folgar, M. Joanis, M. Larizza, J. Martinez-Vazquez, D. Savage, B. Searle, P. Smoke, P.B. Spahn, F. Vaillancourt, L. Viñuela, D.L. Wetzel, S. Yilmaz, F. Zahir
Contents
Contents:
Foreword by Richard Bird xiii
1 Introduction to the volume 1
Serdar Yilmaz and Farah Zahir
PART I CONCEPTUAL ISSUES
2 The architecture of intergovernmental transfers: principles and
practice in low- and middle-income countries 7
Roy W. Bahl Jr
3 Issues in intergovernmental fiscal transfers: public finance and
political economy considerations 21
Serdar Yilmaz and Farah Zahir
4 The practice of fiscal equalization: a political economy
clarification 41
Bernard Dafflon and François Vaillancourt
PART II INTERGOVERNMENTAL TRANSFERS IN
MATURE FEDERATIONS
5 The German model of addressing vertical and horizontal fiscal
imbalances 64
Paul B. Spahn
6 The United States grant system 86
Howard A. Chernick
7 Federal finance arrangements in Canada: the challenges of
fiscal imbalance and natural resource rents 109
Marcelin Joanis and Fran.ois Vaillancourt
8 Revenue and expenditure needs equalization: the Swiss answer 134
Bernard Dafflon
9 Intergovernmental fiscal relations in Australia 163
Bob Searle
10 The economic impacts of horizontal fiscal equalization as
practised in Australia 185
Jonathan Coppel
PART III INTERGOVERNMENTAL TRANSFERS IN
EVOLVING FEDERATIONS
11 Intergovernmental fiscal transfers and performance grants in
Brazil 204
Deborah L. Wetzel and Lorena Viñuela
12 Intergovernmental fiscal transfer system in Argentina:
historical evolution, current performance and reform options
to promote efficiency, equity and transparency 224
Marco Larizza and Julian Folgar
13 Evolving role of the Finance Commissions in India in the
last 25 years 248
Farah Zahir
14 Emerging trends in fiscal transfer systems in selected
federations: implications for India 275
Jorge Martinez-Vazquez
PART IV INTERGOVERNMENTAL TRANSFERS IN
UNITARY FEDERATIONS
15 Intergovernmental fiscal transfers in Kenya: the evolution of
revenue sharing under new devolution in a quasi-federal
system 296
Jamie Boex and Paul Smoke
16 Reforming vertical programmes: the case of South African
local government 323
David Savage
Index 345
Foreword by Richard Bird xiii
1 Introduction to the volume 1
Serdar Yilmaz and Farah Zahir
PART I CONCEPTUAL ISSUES
2 The architecture of intergovernmental transfers: principles and
practice in low- and middle-income countries 7
Roy W. Bahl Jr
3 Issues in intergovernmental fiscal transfers: public finance and
political economy considerations 21
Serdar Yilmaz and Farah Zahir
4 The practice of fiscal equalization: a political economy
clarification 41
Bernard Dafflon and François Vaillancourt
PART II INTERGOVERNMENTAL TRANSFERS IN
MATURE FEDERATIONS
5 The German model of addressing vertical and horizontal fiscal
imbalances 64
Paul B. Spahn
6 The United States grant system 86
Howard A. Chernick
7 Federal finance arrangements in Canada: the challenges of
fiscal imbalance and natural resource rents 109
Marcelin Joanis and Fran.ois Vaillancourt
8 Revenue and expenditure needs equalization: the Swiss answer 134
Bernard Dafflon
9 Intergovernmental fiscal relations in Australia 163
Bob Searle
10 The economic impacts of horizontal fiscal equalization as
practised in Australia 185
Jonathan Coppel
PART III INTERGOVERNMENTAL TRANSFERS IN
EVOLVING FEDERATIONS
11 Intergovernmental fiscal transfers and performance grants in
Brazil 204
Deborah L. Wetzel and Lorena Viñuela
12 Intergovernmental fiscal transfer system in Argentina:
historical evolution, current performance and reform options
to promote efficiency, equity and transparency 224
Marco Larizza and Julian Folgar
13 Evolving role of the Finance Commissions in India in the
last 25 years 248
Farah Zahir
14 Emerging trends in fiscal transfer systems in selected
federations: implications for India 275
Jorge Martinez-Vazquez
PART IV INTERGOVERNMENTAL TRANSFERS IN
UNITARY FEDERATIONS
15 Intergovernmental fiscal transfers in Kenya: the evolution of
revenue sharing under new devolution in a quasi-federal
system 296
Jamie Boex and Paul Smoke
16 Reforming vertical programmes: the case of South African
local government 323
David Savage
Index 345
