A Framework for Evaluating Alternate Institutional Arrangements for Fiscal Equalization Transfers

Anwar Shah

Chapter Chapter 6 in Fiscal Equalization, 2007, pp 141-162 from Springer

Abstract: Abstract Fiscal equalizations programs are fairly common features of intergovernmental fiscal relations in industrial countries. Some developing countries have also recently introduced these programs and still others are contemplating such programs. Institutional arrangements for fiscal equalization vary across countries with wide variations in the form and membership of the relevant decision making bodies. For ease of analysis, these diverse arrangements can be broadly classified into five stylized models: (1) a central government ministry/agency; (2) independent agency (grants commission) reporting either to the executive or the legislature on a permanent or periodic basis; (3) intergovernmental forums including intergovernmental cum civil society forums: (4) national legislature; and (5) sub-national government forums. These arrangements have not yet received the attention that is due in view of their importance in creating a credible and stable fiscal transfers regime and only a handful of recent papers (Searle, 2004, Boex and Martinez-Vazquez, 2004) have documented these carries this work further by providing a simple neo-institutional economics framework for assessing alternative institutional arrangements for their impacts on simplicity, transparency and objectivity of the equalization program as well as transaction costs for various parties involved.

Keywords: Institutional Arrangement; Agency Cost; Home Affair; Federal Minister; National Legislature (search for similar items in EconPapers)
Date: 2007
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Working Paper: A framework for evaluating alternate institutional arrangements for fiscal equalization transfers (2005)
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DOI: 10.1007/978-0-387-48988-9_7

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