 Deficit Targeting: An Incentive Mechanism for Subnational Fiscal Deficit Reduction in BrazilMauricio S. Bugarin, Mirta N. S. Bugarin and Henrique A. Pires Chapter 16 in Economic Development in Latin America, 2010, pp 254-272 from Palgrave Macmillan Abstract: Abstract The traditional debate on fiscal federalism focuses on the trade-off between allocative efficiency and distributive concerns. From the point of view of the allocation of public resources, it is well known that local governments are better suited to accommodate in an efficient way differing preferences among agents. This view suggests that the best fiscal policies are decided at a decentralized local government level. However, from the point of view of the distribution of wealth, the central government has a clear role in designing revenue-sharing rules to achieve a more equitable redistribution of income among different regions of a country with heterogeneous levels of development. This second view suggests a higher level of centralization in a government’s fiscal policy decisions.1 Therefore, the optimal level of decentralization in a federation must reflect the right balance between those two opposing views.2 Keywords: Interest Rate; Unit Root; Central Government; Federal Government; Fiscal Policy (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-29738-8_16 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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