Fiscal Equalization Challenges in the Design of Intergovernmental Transfers [Paperback]

In this book, experts from across the globe highlight the state of knowledge in intergovernmental transfer design. The essays collected in the volume represent creative new thinking about challenging policy issues and offer useful options for policy makers. The book offers academics and practitioners a thorough, thematic assessment of unresolved issues in the design of equalization grants.

Each endogenous variable in the model is a function of the exogenous For later discussion, it is useful to explore this in variables and parameters. more detail for one of the endogenous variables, for example the grant to State i. In this regard, one can define from (6) the per capita grant to a State as where F = [s N] is a vector of variables determined by the federal government, P = [p, p,] is a vector of the local public good prices, CGC = [I, pi c] is a vector of variables determined by the CGC and S = lq, q,] is the strategy set of the two States. Within F, the variable s is determined by the federal government. The total federal population N is determined by things such as the birth and death rate, but also by international migration and hence, to some extent, the population policy of the federal government. Within the vector CGC, the variables yi , pi, c are all determined by the CGC, while the public good provision levels within S are determined by the States. As discussed below, we assume that each State perceives s, N, public good prices and the CGC variables (except the adjustment term c) to be exogenously given. This is reasonable since in practice the States have no impact on s and only a marginal impact on the CGC variables.Challenges in the Design of Fiscal Equalization and Intergovernmental Transfers.- The Nature of Equalization - Objectives and Consequences.- Fiscal Capacity Equalization and Economic Efficiency: The Case of Australia.- Ensuring Inter-Regional Equity and Poverty Reduction.- The Impact of Equalization on Service Delivery.- Harmonlcl