Improving subnational governments’ resilience in the wake of the COVID-19 pandemic

Luiz de Mello and Teresa Ter-Minassian

No 37, OECD Working Papers on Fiscal Federalism from OECD Publishing

Abstract: The COVID-19 pandemic has had devastating effects on lives, the economy, and the public finances worldwide, drawing attention to the need to enhance resilience to future shocks. This paper focuses on subnational governments, given their important and growing role in the provision of essential public goods and services worldwide. The paper discusses key aspects of subnational resilience, in particular the sensitivity of subnational finances to macroeconomic cycles and shocks and the availability of fiscal buffers; the main factors influencing subnational governments’ ability to provide essential services during crises; and their ability to anticipate and prepare for future shocks, especially those related to climate change. The paper also discusses policy and institutional reform options for both national and the subnational governments to strengthen subnational resilience.

Keywords: economic resilience; fiscal federalism; intergovernmental relations; the future of public finance (search for similar items in EconPapers)
JEL-codes: E62 H72 H77 (search for similar items in EconPapers)
Date: 2022-06-30
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ctpaab:37-en

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