The multi-level fiscal governance of ecological transition

Sean Dougherty and Andoni Montes Nebreda

No 44, OECD Working Papers on Fiscal Federalism from OECD Publishing

Abstract: This paper investigates the role of fiscal federalism in driving ecological transition, a key challenge in the United Nations’ Sustainable Development Goals agenda. The ecological transition seeks a sustainable society that prioritises natural resource preservation and reduces environmental impacts. The study investigates the link between fiscal federalism institutions and ecological transition policies, focusing on regional and local governments’ role in implementing environmental goals. Despite subnational governments’ commitment to green objectives, comprehensive plan implementation has been limited due to local governments’ incentive schemes and capacity constraints. The paper examines the potential of fiscal federalism institutions, such as fiscal rules, transfers and capacity-building programs, to support ecological transition policies. The research emphasises engaging regional and local governments in the green agenda and highlights the need for tailored approaches in multi-level fiscal governance to effectively achieve environmental goals. By investigating fiscal federalism’s potential contribution to ecological transition, the paper offers valuable insights for policymakers addressing environmental challenges through a multi-level governance approach.

Keywords: ecological transition; environmental goals; fiscal federal institutions; fiscal federalism; green agendas (search for similar items in EconPapers)
JEL-codes: H23 H77 Q57 (search for similar items in EconPapers)
Date: 2023-06-26
New Economics Papers: this item is included in nep-ene, nep-env and nep-ure
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:ctpaab:44-en

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