Premium
SUBNATIONAL GOVERNMENT ORGANISATION AND PUBLIC DEBT CRISES
Author(s) -
Blankart Charles B.,
Klaiber Achim
Publication year - 2006
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2006.00649.x
Subject(s) - autonomy , debt , politics , government (linguistics) , point (geometry) , economics , liability , law and economics , distribution (mathematics) , public economics , business , public administration , political science , economic system , economic policy , law , finance , linguistics , philosophy , geometry , mathematics , mathematical analysis
Multilevel governments can be organised according to two basic principles: the principle of autonomy and the principle of vertical public administration. In between, there are a number of mixed systems which are questionable from the point of view of distribution of responsibilities. Subnational public debt crises typically occur in mixed federal systems. Preferable to such systems are pure systems with clear responsibilities. Nevertheless, courts can establish clear liability rules and hence contribute to a stabilisation of federal systems. However, court decisions do not supersede a political choice between either of the two pure systems. Two case studies on local governments illustrate under what circumstances a system of autonomy is preferable and how this result can be applied to the European Union.