Vertical Fiscal Imbalances And The Accumulation Of Government Debt

Author : Inaki Aldasoro
Publisher : International Monetary Fund
ISBN 13 : 1484357558
Total Pages : 39 pages
Book Rating : 4.52/5 ( download)

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Download or read book Vertical Fiscal Imbalances and the Accumulation of Government Debt written by Inaki Aldasoro and published by International Monetary Fund. This book was released on 2014-11-20 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Delegating fiscal decision making power to sub-national governments has been an area of interest for both academics and policymakers given the expectation that it may lead to better and more efficient provision of public goods and services. Decentralization has, however, often occurred on the expenditure and less on the revenue side, creating “vertical fiscal imbalances” where sub-national governments’ expenditures are not financed through their own revenues. The mismatch between own revenues and expenditures may have consequences for public finance performance. This study constructs a large sample of general and subnational level fiscal data beginning in 1980 from the IMF’s Government Finance Statistics Yearbook. Extending the literature to the balance sheet approach, this paper examines the effects of vertical fiscal imbalances on government debt. The results indicate that vertical fiscal imbalances are relevant in explaining government debt accumulation suggesting a degree of caution when promoting fiscal decentralization. This paper also underlines the role of data covering the general government and its subectors for comprehensive analysis of fiscal performance.

Author : Si Guo
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.62/5 ( download)

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Download or read book A Dynamic Model of Fiscal Decentralization and Public Debt Accumulation written by Si Guo and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a dynamic infinite-horizon model with two layers of governments to study theoretically and quantitatively how fiscal decentralization affects local and central government debt accumulation and spending. In the model, the central government makes transfers to local governments to offset vertical and horizontal fiscal imbalances. But the anticipation of transfers lowers local governments' expected cost of borrowing and leads to overborrowing ex ante. Absent commitment, the central government over-transfers to reduce local governments' future need to borrow, and in the equilibrium both local and central debts are inefficiently high. Consistent with empirical evidence, when fiscal decentralization widens vertical fiscal imbalances, local governments become more reliant on transfers, and both local and central debts rise. Applied to Spain, the model explains 39 percent of the rise in total government debt when the vertical fiscal imbalances widened during 1988-1996, and 18 percent of the fall in debt when the imbalances narrowed during 1996-2006.

Author : Zsofia Barta
Publisher : University of Michigan Press
ISBN 13 : 0472900927
Total Pages : 225 pages
Book Rating : 4.23/5 ( download)

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Download or read book In the Red written by Zsofia Barta and published by University of Michigan Press. This book was released on 2018-03-22 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do rich countries flirt with fiscal disaster? Between the 1970s and the 2000s, during times of peace and prosperity, affluent countries—like Belgium, Greece, Italy, and Japan—accumulated so much debt that they became vulnerable and exposed themselves to the risk of default. In the past three decades, an extensive scholarly consensus emerged that these problems were created by fiscal indiscipline, the lack of sufficient concern for budgetary constraints from policy makers as they try to please voters. This approach formed the foundation for the fiscal surveillance system that attempted to bring borrowing in European countries under control via a set of fiscal rules. In the Red demonstrates that the problem of sustained, large-scale debt accumulation is an adjustment issue rather than a governance failure. Irrespective of whether the original impetus for borrowing arose from exogenous changes or irresponsible decision making, policy makers invariably initiate spending cuts and/or tax increases when debt grows at an alarming rate for several years in a row. Zsófia Barta argues that explaining why some countries accumulate substantial amounts of debt for decades hinges on understanding the conditions required to allow policy makers to successfully put into place painful adjustment measures.

Author : M. Ayhan Kose
Publisher : World Bank Publications
ISBN 13 : 1464815453
Total Pages : 403 pages
Book Rating : 4.54/5 ( download)

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Download or read book Global Waves of Debt written by M. Ayhan Kose and published by World Bank Publications. This book was released on 2021-03-03 with total page 403 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economy has experienced four waves of rapid debt accumulation over the past 50 years. The first three debt waves ended with financial crises in many emerging market and developing economies. During the current wave, which started in 2010, the increase in debt in these economies has already been larger, faster, and broader-based than in the previous three waves. Current low interest rates mitigate some of the risks associated with high debt. However, emerging market and developing economies are also confronted by weak growth prospects, mounting vulnerabilities, and elevated global risks. A menu of policy options is available to reduce the likelihood that the current debt wave will end in crisis and, if crises do take place, will alleviate their impact.

Author : Mr.James Daniel
Publisher : International Monetary Fund
ISBN 13 : 9781589065130
Total Pages : 80 pages
Book Rating : 4.31/5 ( download)

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Download or read book Fiscal Adjustment for Stability and Growth written by Mr.James Daniel and published by International Monetary Fund. This book was released on 2006-08-17 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: The pamphlet (which updates the 1995 Guidelines for Fiscal Adjustment) presents the IMF’s approach to fiscal adjustment, and focuses on the role that sound government finances play in promoting macroeconomic stability and growth. Structured around five practical questions—when to adjust, how to assess the fiscal position, what makes for successful adjustment, how to carry out adjustment, and which institutions can help—it covers topics such as tax policies, debt sustainability, fiscal responsibility laws, and transparency.

Author : OECD
Publisher : OECD Publishing
ISBN 13 : 9264254056
Total Pages : 152 pages
Book Rating : 4.53/5 ( download)

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Download or read book Fiscal Federalism 2016 Making Decentralisation Work written by OECD and published by OECD Publishing. This book was released on 2016-06-20 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: Fiscal Federalism 2016 covers: spending and tax devolution, fiscal constitutions of federal countries, immovable property taxation, the spending power of sub-central governments, the own tax resources and intergovernmental grants mix, and rules and frameworks for sustainable debt management.

Author : OECD
Publisher : OECD Publishing
ISBN 13 : 9264897909
Total Pages : 238 pages
Book Rating : 4.08/5 ( download)

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Download or read book OECD Fiscal Federalism Studies Fiscal Decentralisation and Inclusive Growth in Asia written by OECD and published by OECD Publishing. This book was released on 2019-06-13 with total page 238 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report looks at the challenges faced by Asian countries in addressing inclusive growth and fiscal decentralisation. A series of studies examines how policies in the region have evolved in accordance with changes in demography and the economic environment, reflecting country characteristics, history and political economy forces.

Author : OECD
Publisher : OECD Publishing
ISBN 13 : 9264943005
Total Pages : 212 pages
Book Rating : 4.01/5 ( download)

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Download or read book OECD Fiscal Federalism Studies Local Public Finance and Capacity Building in Asia Issues and Challenges written by OECD and published by OECD Publishing. This book was released on 2020-12-22 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: Subnational governments’ capacity to effectively fund and deliver public services are crucial for the realisation of the benefits of decentralisation. However, subnational capacities often suffer from significant weaknesses, ranging from inadequate assignments of own-revenues, through to flaws in tax administration, the design of intergovernmental transfers, spending assignments and various aspects of public financial management.

Author : Rasmané Ouedraogo
Publisher : International Monetary Fund
ISBN 13 : 1513546031
Total Pages : 35 pages
Book Rating : 4.32/5 ( download)

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Download or read book Fiscal Resilience Building: Insights from a New Tax Revenue Diversification Index written by Rasmané Ouedraogo and published by International Monetary Fund. This book was released on 2020-06-12 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Does the reliance on diversified tax structure enhance resilience to fiscal risks? This paper gives an answer to this question by proposing a new cross-country tax revenue diversification index (RDI). The RDI builds on the Theil index, and unlike the few existing tax diversification indices, which are constructed only at the state level for the US, is computed at the national level, covering a broad panel of 127 countries over the period 2000-15. We find suggestive evidence that tax revenue diversification reduces tax revenue volatility, thus bringing to the data long-held views about the prominence of tax revenue diversification for fiscal resilience strengthening. While exploring the drivers of the RDI, we find that tax revenue diversification is not just a reflection of economic diversification, but also an outcome of macroeconomic, political and institutional factors. Interestingly, a non-monotone relationship is also at play between the RDI and economic development, with countries’ portfolio of tax sources getting more diversified as their economy develops, until a tipping point, where richer countries start finding it harder to diversify further their tax revenue sources.

Author : Christine R. Martell
Publisher : Oxford University Press
ISBN 13 : 0190089350
Total Pages : 217 pages
Book Rating : 4.51/5 ( download)

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Download or read book Information Resolution and Subnational Capital Markets written by Christine R. Martell and published by Oxford University Press. This book was released on 2021-08-10 with total page 217 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive explanation of information institutions as they relate to the success of subnational capital markets Global trends in decentralization and the growing role of world cities have increased the importance of infrastructure development. But with competing incentives of suppliers and borrowers of capital in the web of institutional governance arrangements, information problems are inevitable. Understanding how local choices affect these larger trends can help national and city actors not just avoid being paralyzed by information problems, but actually improve information resolution. In this book Christine R. Martell, Tima Moldogaziev, Salvador Espinosa argue that capital markets are a viable financing alternative for subnational borrowers. They explain how subnational governments can manage their fiscal and debt choices to leverage capital markets to finance efficient, effective, and equitable infrastructure provision. The book builds on previous work by exploring the role of information institutions as they relate to the success of subnational capital markets and by advancing options for subnational government to gain agency as active market participants. With broad geographic coverage, Information Resolution and Subnational Capital Markets answers core questions: How does information permeate the landscape and outcomes of subnational government borrowing, both at the aggregate national level and at the city level? What measures and mechanisms can national and subnational governments take to resolve information problems? And, what can cities do to enhance their agency vis-à-vis central governments and capital market actors, so that they can command a voice in managing internal and external sources of capital financing?