This paper explores the impact of decentralization on countries' fiscal outcomes paying attention to one aspect usually neglected in the literature: the relevance of self-interested local politics. Relevance that can be proxied by the nationalization of political party systems, namely the extent...

Recent state and municipal budget crises have generated a great deal of consternation among market participants and policymakers; they have also led scholars to debate the merits of bailouts or other forms of debt relief. This Essay considers why the mechanisms that were supposed to control...

Like a number of other states, Oregon has been hampered in its pension reform efforts since 1996 by its state supreme court's embrace of the “California Rule,” a doctrine arising, in Oregon's case, from a misunderstanding of federal Contract Clause precedent. Under the misreading, states...

Countries where social and political institutions stimulate interpersonal trust, civic cooperation, and social cohesiveness tend to have more efficient governments, better governance systems, and faster growth. This paper provides cross-country evidence, based on a sample of developing and...

Countries have adopted various institutional responses to subnational government borrowing. Using a sample of 44 countries 1982-2000, this paper provides a panel data analysis to determine the most effective borrowing constraints for containing local fiscal deficits. The results suggest that no...

In this article we examine the relations between risk, the choice of foreign or local contract terms (parameters) and maturity in the sovereign debt market. Our primary finding is that the maturities of bonds that carry a meaningful degree of risk (rating BBB+ and below, which we label Lower...

Issuing sovereign bonds in the international markets using a trust structure rather than a fiscal agency agreement conveys several benefits for the issuer and the holders of the bonds. Principal and interest payments received by a trustee will be less susceptible to attachment by third party...

Subnational insolvency is a reoccurring event in development, as demonstrated by historical and modern episodes of subnational defaults in both developed and developing countries. Insolvency procedures become more important as countries decentralize expenditure, taxation, and borrowing, and...

Tokyo has been chosen as the host city for the 2020 Summer Olympic and Paralympic Games ("2020 Tokyo Olympics"). In this report we see from the Tokyo Metropolitan Government's approach to fiscal management and its attitude to the Olympics thus far that the fiscal burden placed on it by the 2020...

The staggered passage of state medical marijuana laws increases state bonds' offering and trading spreads by 7-11 basis points. Consistent with medical marijuana laws causing an increase in states' credit risk, states incur higher safety and public welfare expenditures and experience greater...