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Fiscal Decentralization as Development Policy
Author(s) -
Bahl Roy
Publication year - 1999
Publication title -
public budgeting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.694
H-Index - 30
eISSN - 1540-5850
pISSN - 0275-1100
DOI - 10.1046/j.0275-1100.1999.01163.x
Subject(s) - decentralization , economics , fiscal federalism , context (archaeology) , relevance (law) , government (linguistics) , developing country , fiscal policy , fiscal union , macroeconomics , economic policy , politics , economic system , market economy , political science , economic growth , paleontology , linguistics , philosophy , law , biology
Fiscal Decentralization is a popular economic development strategy among transition and developing countries. This article reviews the advantages of fiscal decentralization in a theoretical context, but critiques the relevance of the standard theory of federalism as it applies to emerging economies. It is argued that the macroeconomic benefits of fiscal centralization, the absence of good instruments of local government finance, and the centralist politics that characterize most low income countries have been strong enough to hold back increased emphasis on local government finance.