Empirical studies of the effects of intergovernmental grants to localities do not support standard microeconomic predictions. Block grants have surprisingly large positive effects on public expenditures. Researchers have attributed this “flypaper effect” to imperfect information (fiscal...

The paper argues that international differences in fiscal conditions influence the relative attractiveness of locating production facilities in different countries and could prove to be a troublesome source of instability for the European economies. Even though physical capital movements tend to...

In preparing for the discussions of the Iraqi Constituent Assembly, IMF and World Bank staff and consultant experts presented to senior officials from the central and local governments in Iraq, including from Kurdistan, key options that might be relevant for the discussions. This paper reflects...

Based on cross-country data for up to 78 countries, this paper shows that fiscal decentralization-the assignment of expenditure and revenue mobilization functions to subnational levels of government-is associated with various indicators of governance, such as corruption, rule of law, and...

Full implementation of an intergovernmental transfer system based on revenue capacities and expenditure needs could significantly improve both redistribution and equity objectives of the Chinese authorities. This was envisaged in the 1994 fiscal reforms, but the authorities were unable to...

Austria has relatively strong macroeconomic fundamentals, but also deep ties with the rest of the euro area. The legacy of an overly ambitious eastward financial sector expansion has created substantial challenges to its policymakers. Policies have been designed to preserve market confidence,...

The Austrian authorities introduced new supervisory guidance aiming at constraining the funding model of the three largest Austrian banks’ subsidiaries. The guidance introduced the concept of Loan-to-Local-Stable-Funding Ratio (LLSFR) as a monitoring tool of business model sustainability....

This paper reviews economic developments in Austria during 1995–96. A review of developments and short-term prospects for the domestic economy, the public finances, monetary and exchange rate policy, and the balance of payments is presented. Several estimates of potential output and the output...

In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country

Increasing integration to the East has benefited the Austrian economy, but also created vulnerabilities that came to a head with the global financial crisis. The crisis has highlighted old challenges and created new ones that need to be addressed. The banking sector’s return to more normal...