In the context of the increasing budget deficit and public debt, on one hand, and the need to restore economic growth without compromising financial stability and fiscal sustainability on long term, on the other hand, governments must undertake severe measures concentrated especially on...

This article uses Puerto Rico's ongoing financial crisis as an opportunity to explore complex policy issues that arise when a federalist regime's central government must decide whether – and how – to assist a struggling subnational government entity. It first describes Puerto Rico's dramatic...