In China, most of the service delivery responsibilities are assigned to the subnational governments. Yet for reasons of efficiency in tax collection and administration, the central government collects revenues far in excess of its expenditure needs. In 2003 the central government collected 70...

This paper discusses fiscal responsibility laws in Latin America, with special attention to their provisions for fiscal discipline by subnational governments. It discusses why and when such laws might be useful-to help resolve the coordination problem in getting diverse governments to avoid...

Recent experience with fiscal decentralization in many developing and transition economies has led many observers to question whether fiscal decentralization undermines macroeconomic stability. In several countries, transfers from central to lower-level governments have increased fiscal deficits...

China has experienced more than 25 years of extraordinary economic growth. Underlying this growth has been a decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investmentsto stimulate local development, and are allowed to retain a large...

A recent survey of 1,948 retail stores in India conducted by the World Bank's Enterprise Surveys shows that 19 percent of the stores use computers for their business. In some states like Kerala, computer use is as high as 40 percent. Using this data the author finds labor regulation as an...

Local government size varies dramatically around the world. In Sudan, Cote d'Ivoire, and the United Kingdom, municipalities average more than 125,000 people. Those in many European countries have less than 10,000 people. Countries often consider consolidation of local governments as a means to...

Adjustment programs often emphasize protecting social spending - especially pro-poor spending - from cuts. Yet the incidence of fiscal contraction - and hence the case for action to protect public spending on the poor at a time of overall fiscal austerity - is an empirical question, which the...

This paper discusses trends in fiscal adjustment in Brazil since the 1990s, with particular emphasis on the strengthening of institutions for fiscal policymaking, and its effect on local government finances and their ability to invest in infrastructure building and upgrading. Although fiscal...

Since South Africa held its first democratic elections in 1994, it has given significant attention to building an effective system of decentralization including provincial and local government. While provincial governments are responsible mainly for the implementation of social services such as...

In shifting to decentralized public finances, a country's central government faces certain fiscal management problems. First, during and soon after the transition, unless it reduces pending or increases its own tax resources, the central government tends to have higher deficits as it shifts...