In this paper, we explore the effects of India's federal structure on state-level fiscal responsibility. Drawing from a 1991-2018 dataset, we argue that higher levels of transfer and borrowing dependence (soft budget constraints) from the central government facilitate lower levels of fiscal...

This paper studies the provision of public inputs in a federal system. A vertical tax externality is also considered in a simple general equilibrium model used to analyze the efficiency of equilibria under different scenarios. The results show that the state provision of public inputs may affect...

Empirical evidence from the U.S. and the European Union suggests that regions which contribute to interregional redistribution face weaker borrowing constraints than regions which benefit from interregional redistribution. This paper presents an argument in favor of such differentiated budgetary...