Handbook of Fiscal Federalism
Show Less

Handbook of Fiscal Federalism

  • Elgar original reference

Edited by Ehtisham Ahmad and Giorgio Brosio

This major Handbook addresses fiscal relations between different levels of government under the general rubric of ‘fiscal federalism’, providing a review of the latest literature as well as an invaluable guide for practitioners and policy makers seeking informed policy options. The contributors include leading lights in the field, many of whom have themselves made seminal contributions to the literature.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 12: Normative Versus Positive Theories of Revenue Assignments in Federations

Maria Flavia Ambrosiano and Massimo Bordignon

Extract

12 Normative versus positive theories of revenue assignments in federations Maria Flavia Ambrosanio and Massimo Bordignon Introduction This chapter is organized around a number of questions. First, how are local governments financed around the world, and in particular what is the role of local taxation in this financing? Second, what has economic theory to say about this allocation, both on normative and positive grounds? In particular, can it explain what we observe? Third, which are the practical important issues that one should consider in designing a local tax system? For example, given the presence of increasing administrative costs for decentralization, how could one use the existing national taxes to create room for local tax autonomy? And how should tax enforcement powers be allocated across levels of government? A simple list of open problems may be of great help in understanding the issues involved in designing a local tax system. The bibilography at the end of the chapter offers a guide to the more specialized literature. Even in this more limited framework, there are several issues that we can just touch on in the chapter. First, there is, or there should be, an obvious link between a local tax system and the expenditure which this tax system is supposed to finance. Both the level and the characteristics of the local expenditure should enter as variables in the equation concerning the determination of the optimal local tax system (see, for example, Gordon 1983). We recognize this problem, but do not investigate it...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.