While there is a large body of literature on the determinants of allocation of intergovernmental …fiscal transfers in developed countries, this kind of study is still very limited for developing countries, especially Subsaharan countries. Using an original micro-level public fi…nance panel...

Theoretical developments in political economy analyses of intergovernmental transfers identify several factors previously ignored in the empirical literature and emphasize the importance of institutional details. Combined, these two developments create a degrees of freedom problem and make cross...

This paper focuses on options for reforming the Brazilian Revenue-Sharing scheme for the States, the so-called Fundo de Participação dos Estados or FPE, which constitutes one of the main intergovernmental transfers in Brazil. This focus is justified by the fact that such a reform has become an...

Since 1994, China's central government has implemented a sequence of fiscal recentralization measures to increase its equalization capacity and reduce regional income disparities. However, the effect of intergovernmental transfers on equalization has been called into question by anecdotal...

We study partisan favoritism in the allocation of intergovernmental transfers. Our dataset combines local council election data with fiscal data on grant allocations in the German state of Hesse. Our identification strategy is a regression discontinuity design that relies on a perturbation...

In this article we study the role of inter-regional externalities of public goods, equity, and electoral competition in determining the budget of the central government on local public goods. The main results of the paper are: first, our model predicts that the federal budget on local public...

Motivated by recent disasters, this paper analyzes the risk sharing aspect in a federation. The regions can be hit by a shock leading to losses that occur with an exogenous probability and in a stochastically independent way. The regions can spend effort on self-insurance to reduce the size of...

This paper studies the effect of costly taxation on the fiscal response of local governments to intergovernmental transfers. Using a panel dataset of Peruvian municipalities, I find robust evidence that central government's grants have a greater stimulatory effect in municipalities facing higher...

Fiscal federalism has been an important topic among public finance theorists in the last four decades. Developing and transition countries have developed a variety of forms of fiscal decentralization as a possible strategy to achieve effective and efficient governmental structures. A generalized...

Motivated by recent disasters, this paper analyzes the risk sharing aspect in a federation. The regions can be hit by a shock leading to losses that occur with an exogenous probability and in a stochastically independent way. The regions can spend effort on self-insurance to reduce the size of...