Decentralization and the duration of fiscal consolidation: Shifting the burden across layers of government

This paper analyzes the relationship between fiscal decentralization, the duration of fiscal consolidation episodes, and their success for 17 OECD countries between 1978 and 2009. The consolidation of the general government budget appears to be of longer duration when expenditure decisions are more...

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Detalles Bibliográficos
Autores: Foremny, Dirk, Sacchi, Agnese, Salotti, Simone
Tipo de recurso: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2017
País:España
Institución:Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya)
Repositorio:Recercat. Dipósit de la Recerca de Catalunya
OAI Identifier:oai:recercat.cat:2445/119528
Acceso en línea:https://hdl.handle.net/2445/119528
Access Level:acceso abierto
Palabra clave:Administració fiscal
Descentralització administrativa
Tax administration and procedure
Decentralization in government
Descripción
Sumario:This paper analyzes the relationship between fiscal decentralization, the duration of fiscal consolidation episodes, and their success for 17 OECD countries between 1978 and 2009. The consolidation of the general government budget appears to be of longer duration when expenditure decisions are more decentralized. We also find that transfers from higher levels of government are cut during consolidation episodes, suggesting that central governments shift the burden of consolidation towards lower tiers of government. This is especially true when the latter have little legal autonomy to raise tax revenues and have little influence over executive decisions taken at the central level. We document that this increases local governments' public debt/GDP ratios. In terms of the success of consolidation episodes, countries with greater degrees of decentralization appear to make smaller improvements in their primary balance when consolidating.