In a multi-level government system, the assignment of roles and responsibilities and institutional legacies between the federal and the subnational governments often create imbalances. A common challenges is a primary vertical fiscal imbalance, which is typically the result of differences in the alignment of revenue-raising capacity and the spending responsibilities of the different levels of the government. Intergovernmental fiscal transfers are designed to correct this imbalance and to restore vertical fiscal balance.
The volume Intergovernmental Transfers in Federations—published by Edward Elgar in 2020 and edited by Serdar Yilmaz and Farah Zahir (Governance Global Practice, The World Bank)—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.
The volume 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.
|TABLE OF CONTENTS
Foreword – Richard Bird
1 Introduction to the volume – Serdar Yilmaz and Farah Zahir
PART I CONCEPTUAL ISSUES
2 The architecture of intergovernmental transfers: principles and practice in low- and middle-income countries – Roy W. Bahl Jr
3 Issues in intergovernmental fiscal transfers: public finance and political economy considerations – Serdar Yilmaz and Farah Zahir
4 The practice of fiscal equalization: a political economy clarification – Bernard Dafflon and François Vaillancourt
PART II INTERGOVERNMENTAL TRANSFERS IN MATURE FEDERATIONS
5 The German model of addressing vertical and horizontal fiscal imbalances – Paul B. Spahn
6 The United States grant system – Howard A. Chernick
7 Federal finance arrangements in Canada: the challenges of fiscal imbalance and natural resource rents – Marcelin Joanis and François Vaillancourt
8 Revenue and expenditure needs equalization: the Swiss answer – Bernard Dafflon
9 Intergovernmental fiscal relations in Australia – Bob Searle
10 The economic impacts of horizontal fiscal equalization as practised in Australia – Jonathan Coppel
PART III INTERGOVERNMENTAL TRANSFERS IN EVOLVING FEDERATIONS
11 Intergovernmental fiscal transfers and performance grants in Brazil – 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 – Marco Larizza and Julian Folgar
13 Evolving role of the Finance Commissions in India in the last 25 years – Farah Zahir
14 Emerging trends in fiscal transfer systems in selected federations: implications for India – 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 – Jamie Boex and Paul Smoke
16 Reforming vertical programmes: the case of South African local government – David Savage