This paper develops a framework that distributes reductions in state aid based on underlying local fiscal health. Under this framework, the state gives smaller aid cuts to communities that are in worse underlying fiscal health and receive less existing aid. This framework therefore provides a...

I exploit unusual policy variation in Indonesia to examine how local responses to intergovernmental grants depend on their persistence. A national reform produced permanent increases in the general grant that were larger for less densely populated districts. Hydrocarbon-rich districts...

Considerable attention has been given to enhancing subnational development finance in response to the 2008 global financial crisis and recent global development agendas, including the Sustainable Development Goals, Financing for Development, and Habitat III/New Urban Agenda. Much work on this...

This paper reviews the literature and evidence on the most appropriate structure of regional and local taxes in developing countries. A good subnational tax system is critical to an effective and sustainable system of intergovernmental fiscal relations - a need that has become increasingly...

The authors employ panel Vector Error Correction Models (VECM) and cointegration framework to identify the existence and direction of the causal association between foreign direct investment (FDI) in financial services and financial development for 26 emerging economies for the period 2003-2015....