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Fiscal Equalization Schemes and Subcentral Government Borrowing

Salvador Barrios () and Diego Martínez

No 595, ADBI Working Papers from Asian Development Bank Institute

Abstract: Examining the cases of Canada, Germany, and Spain, the role played by fiscal equalization schemes in determining subnational borrowing was analyzed, and the link between regional governments’ primary fiscal balances and gross domestic product per capita was tested econometrically. The study results show that either poor or rich regions can display higher regional public borrowing on average, and these results can be linked to the institutional design of regional equalization systems in place. Particular elements, such as tax efforts and fiscal capacities, also play relevant roles in this regard. Reforms of these schemes can therefore prove instrumental in reducing regional heterogeneity in public borrowing.

Keywords: Fiscal equalization schemes; government borrowing; public borrowing; subnational borrowing; fiscal capacity; Canada; Germany; Spain; 公共借入金; 政府借入金; 財政能力 (search for similar items in EconPapers)
JEL-codes: H70 R50 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-10-27
New Economics Papers: this item is included in nep-acc, nep-pbe, nep-pub and nep-ure
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Related works:
Chapter: Fiscal equalization schemes and subcentral government borrowing (2017) Downloads
Working Paper: Fiscal equalisation schemes and sub-central government borrowing (2014) Downloads
Working Paper: Fiscal equalisation schemes and sub-central government borrowing (2013) Downloads
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