Incentivizing Fiscal Transfers in the Indian Federation

The sharp deterioration in the fiscal health of the states hasbeen a matter of concern for policymakers. The remedial measuresrecently taken include the institution of the Medium Term FiscalRestructuring Policy (MTFRP), stipulating performance requirementsfor borrowing from the World Bank and the Asian DevelopmentBank (ADB), and the Accelerated Power Development and ReformProgram (APDRP). This article evaluates these schemes. The importantconclusions are that (1) incentive-linked transfers are toosmall to make any difference to fiscal performances, (2) multipleschemes create segmented incentives, (3) there are serious problemsof design, and (4) the schemes do not address the basic causesof deterioration in the states 'fiscal performance.     

Peace and Conflict: Alternative Strategies of Governance and Conflict Resolution

This article examines the present discourse of conflict resolution and offers an alternative framework for analyzing the generic sources of conflict at the community, state, and interstate levels. In particular, we argue that although peace is a universal value, there are no universally best strategies to achieve it. This, however, does not mean that the path to peace is fundamentally different in every context. We claim that stable democratic political structures in general lead to peace both in the international and the domestic realms. As such, democratization does lead to peace, but the paths to stable democracy are context sensitive. Therefore, the success of efforts aimed at creating long-term peace, both among and within nations, depends on the extent to which, democratization incorporates the norms and values of the societies in question. The article begins with a brief overview of some of the problems associated with defining peace. We suggest that peace should be looked at as a universal value, as democracy has been in the recent past. We provide a more detailed theoretical assessment of the linkage between democracy and peace. Our general argument is illustrated in the South Asian, specifically the Indian, context.     

Financing the German Federal System in the 1980s

Public finance is a crucial issue in any federation. In thesystem of shared public financing in Germany, no unit of governmentis fiscally dependent on the other. The federal and Land governmentsshare the personal income tax, the corporation tax, and thevalue-added sales tax. Because the Bundesrat approves of theshares of these tax yields granted the federal and Land governments,the Länder are deeply involved in the public finance system.Fiscal equalization occurs both vertically and horizontally.The federal government provides the Länder with grants-in-aid,and also shares the financing of a number of "joint tasks."The Länder share their tax yields with their local governments.Fiscal transfers also take place among the richer and poorerLänder and among the municipalities within the boundariesof individual counties. Controversy exists over the shares tobe given the respective governments from the value-added taxand over fiscal equalization between the richer (South) andpoorer (North) Länder.     

Natural Resources and Canadian Federalism: Decentralization, Recurring Conflict, and Resolution

Canada has an unusual degree of decentralized authority overnatural resources. A recurring challenge of resource policyhas been to balance interrelated powers—of managementand taxation provincial governments and of trade and taxationby the federal government—when there is divergence inthe goals of the two governments. Constitutional amendment in1982 and federal-provincial negotiations in the 1970s and 1980sconfirmed the need for accommodation. The result was to strengthenthe decentralization of management, yet to recognize the legitimacyof the interests of both orders government. Especially withthe emergence of new types of interests in the resource sector,occasional frictions may be anticipated because of the interrelatednessof powers.     

Fiscal Policy,Deficits and Politics of Subnational Governments: The Case of the German Laender

The first part of the paper briefly describesinstitutional aspects of the German federal system andexamines the economic and fiscal performance of theGerman Laender since 1970. Taking into account theinstitutional settings, especially the fact that theGerman Laender cannot set tax rates individually, wedevelop a highly stylized model of subnationalgovernments that do not have access to the tax rateinstrument and thus have to use expenditures as apolicy variable. The model implies an expendituresmoothing policy of subnational governments andcomplements the famous tax smoothing model. Theempirical section examines whether governments ofvarious ideology show significant differences infiscal stabilization policy. Our results indicatethat regional differences in public debt accumulationand public expenditure policy in general is largelydetermined by interregional differences in economicperformance, whereas we do not find any significantimpact on the ideological composition of the Laendergovernments.     

Brazil: The Prospects of a Center-Constraining Federation in a Fragmented Polity

Although there have been deep changes in the federation as aconsequence of redemocratization and decentralization, Brazilcontinues to exhibit profound imbalances among regions. Theseimbalances create contradictions and tensions in Brazilian federalism.The central problem addressed in this article is to identifythe main difficulties facing federalism, and to assess theirconsequences on the prospects of federalism should tensionscontinue unabated. Brazilian federalism has always been a meansof accommodating deep-rooted regional disparities. Althoughthere are political and fiscal mechanisms to offset some ofthe problems of regional disparities, such mechanisms have beeninsufficient to counteract a long history of uneven regionaldevelopment. Because of the country's inequalities, the capabilitiesof subnational governments to respond to Brazil's current demandsand agendas are highly uneven.     

单向主导财政事权划分的悖论与化解:一个激励相容分析框架

单向主导财政事权划分的模式保证了上级意志的体现,但是忽略了作为委托方的民众变量,出现了财政事权划分的维护中央权威与激发地方积极性、财力集中与责任下移、单向主导决策与地方信息优势、等级分明与权力差等、民生导向与晋升激励等五大悖论,改变了地方政府的激励模式,不能有效满足当地居民的公共需求.因此,需要在事权划分中加入民众这一变量,通过公共服务事责、规范转移支付、明确共同事权主体责任、加强纵向协商、地方考核民主化等措施建构起以中央、地方、当地居民为主体的三方激励相容制度,化解单向主导财政事权划分的悖论.     

State Fiscal Strategies for the 1990s: Balancing Budgets in a Recession

The fiscal crunch facing many states in FY 1991 has its rootsin the recession, federal mandates, election-year politics,and rapid growth in spending for Medicaid and corrections. Southernand midwestern states that made drastic cuts in response tothe 1981–1982 recession have fared relatively well, butstates in the Northeast have faced tax increases, layoffs, cutsin services, and prolonged conflict over state budgets. Althoughthe tax revolt has not led to appreciably lower taxes, it hasmade raising taxes more difficult, and has heralded a shiftto "boutique government," which may create further fiscal problemsin the long run. State tax increases and spending cutbacks mayalso delay recovery from the recession.     

Fiscal Exchange and Tax Compliance: Evidence From a Field Experiment

Behavioral interventions appealing to taxpayers’ reciprocity often leave tax compliance unaffected. We provide evidence that a “fiscal exchange nudge” increased tax compliance in a setting where one might not expect it: crisis-ridden Argentina. In a randomized controlled trial with over 20,000 taxpayers, a tax bill visually celebrating realized public works benefiting children increased payment rates of tax delinquents by about 20 percent, or almost 40 percent when the bills were delivered in person. Without the appeal, the new bill design generated significantly fewer payments. Changes in the design of the tax bill also increased arrears cancellation. We estimate the ratio of marginal revenues to costs for the fiscal exchange bill to be 18. The factors we associate with the unexpectedly positive impacts are consistent with strengthening an affective response. We find persistent effects of the experiment two years later. The results suggest that communities have more scope to increase tax revenues through non-threatening interventions.     

Fiscal Decentralization and Provincial-Level Fiscal Disparities in China: A Sino-U.S. Comparative Perspective

Since China's 1994 fiscal reform, increasing concerns have been voiced about fiscal disparities across the country. Can local governments fairly and effectively fulfill basic public services such as primary education, public health, and social welfare? This essay traces the evolution of intergovernmental relations in China since 1978. The fluctuation of provincial level fiscal distribution over time and the underlying factors behind fiscal inequality, as compared to a decentralized American revenue system, are analyzed. The author, Zhirong Jerry Zhao of the University of Minnesota, argues for additional research on alternative measures of local fiscal capacity.     

Public Administration in a Conflict Situation: The Case of Northern Ireland

This article examines recent developments in the public administrative system in Northern Ireland. The conflict in Northern Ireland has received widespread publicity, Yet government in the region continues. Public services are delivered. The article considers how the public administrative system has played its part in the management by the British government of the conflict. There are many other situations where there is political violence. The Northern Ireland case may offer insights to public administrators and policymakers in managing such situations.     

Carving Out Policy Space for State Government in a Federation: The Role of Coordination

To be a player in federal negotiations, state governments needsophisticated internal coordination skills. The more intensethe federal agenda, the greater the demands made on state governmentmachinery to prepare comprehensive policy advice for those representingthe state. This study argues that moves in Australia to reformfederalism, by dealing with jurisdictional overlap, also produceda significant upgrading of state coordination capacity. A casestudy of one state, Queensland, in the Council of AustralianGovernments (COAG) experiment suggests how states carve outa space in negotiations by rethinking their internal governancearrangements.     

Implementing Fiscal Decentralization: A Case Study of a Regional Tax Agency in Italy

As a measure to enhance the fiscal autonomy of the region, in 2006 the Regional Government of Sardinia in Italy decided to establish a tax agency for managing regional taxes on holiday houses and boat and aircraft transit. Based on interviews conducted with the tax agency director and staff, this article traces the trajectory and outcome of events included in the implementation of this part of the regional government's fiscal policy. Drawing from this case, this article theorizes the process of implementing fiscal decentralization by addressing the issue of how fiscal policy decisions affect the management of tax agencies in the start‐up stage. Social mechanisms of learning, brokerage, and actor certification provide important linkages between fiscal policy choices and organizational change. On the whole, the research argument made in this article further contributes to institutionalist and processualist research trends in current research on organization studies and public management.     

German Federalism in Historical Perspective: Federalism as a Substitute for a National State

A German national state was founded comparatively late in themodern era. In 1871 the German princes formed the German Empire.Unde Prussian hegemony, the Empire remained dependent on itsmember states. The constitution of the Weimer Republic of 1919turned the relations between the federation and the states upsidedown. The Länder, as the constituent states close to beinga decentralized unitary state. The Nazi regime centralizd it.After World War II, the West Germans and the Western Alliesagreed on forming a federal type of government. There was, however,controversy about the kind of federalism to be established.The West German Basic Law retained the tradition of a secondfederal parliamentary chamber in which the Land governmentsare represented. Sovereignty is shared and exercised jointlyby the federation and the Länder in most domestic policyfields.     

Pitfalls in Military Quantitative Intelligence Analysis: Incident Reporting in a Low Intensity Conflict

Incidents are the key data for several of the statistical reports and analyses created within the military intelligence community. This paper discusses factors that affect the utility of quantitative methods in military intelligence analysis when used in a low intensity conflict. The first half of the paper presents the general critique of the use of quantitative methods. The second half applies this critique to the case of incident reporting in Afghanistan.     

Fiscal Decentralization Policies in the EU: A Comparative Analysis through a Club Convergence Analysis

Abstract

We study the degree of convergence or divergence in fiscal decentralization in the European Union over the period 1995–2015 using a club convergence approach. First, we analyze non-central expenditure and revenue as percentages of GDP, of total expenditure and of total revenue. The results for the EU-15 countries indicate some clustering, with three clubs formed when using GDP and four to five when using total revenue or expenditure. Second, we study the gap between expenditure and revenue as a proxy of fiscal responsibility. This results in three and two clubs respectively, with Denmark as the divergent country with the highest gap. Finally, we analyze potential unions of clubs and transitions. We also interpret our results taking into account variables found in the literature as determinants of fiscal decentralization. These results show how European countries are quite heterogeneous in terms of fiscal federalism and decentralization, with greater convergence in fiscal responsibility than in the other magnitudes.