A standard finding in the literature on political agency is that voters punish incumbents who raise taxes. Typically, only the reaction of a representative voter is considered, with the notion that all voters dislike high taxes because the revenue is, at least on the margin, spent on...

We study the fiscal and tax response to intergovernmental grants, exploiting quasi-experimental variation within Germany’s fiscal equalization scheme triggered by Census revisions of official population counts. Municipal budgets do not adjust instantly. Instead, spending and investments adapt...

We study the fiscal and tax response to intergovernmental grants, exploiting quasi-experimental variation within Germany's fiscal equalization scheme triggered by Census revisions of official population counts. Municipal budgets do not adjust instantly. Instead, spending and investments adapt...

We investigate how lump-sum equalization transfers affect expenditures and taxes in the municipalities of the largest German state North Rhine-Westphalia. In general, those general-purpose transfers cannot be treated as exogenous variables. Thus, for the identification of causal effects, two...

We study the fiscal policy reactions of municipalities in the German state of North Rhine-Westphalia to an unanticipated spending shock. The implementation of a horizontal transfer system led to additional contributions for selected municipalities. Using the quasi-random assignment, we examine...

The government fragmentation hypothesis (GFH) states that coalition governments spend more than single-party governments due to an underlying common pool problem. Using a large panel data set on 604 local governments in the German state of Baden-Württemberg for the 1994-2014 period, I test the...

This paper provides empirical evidence of the impact of fiscal decentralization on Colombia’s public basic education. Based on the social and economic data available for 1,003 municipalities and 13,670 public schools, for the last decade, we confirmed that decentralization has had a positive...

It has been a tradition of state tasks (for 250 years) to focus on financing current expenditures. The task financing system introduced undertakes to fund average current expenditures, with utilisation rules stricter than before. In addition, the features characterising the management of assets...

State and local governments in OECD countries have access to a variety of fiscal resources. Discretion over these resources varies considerably, and so does sub-central governments’ power to shape public service delivery. The design of fiscal autonomy affects sub-central government’s...

Finnish municipalities enjoy ample fiscal autonomy and provide or arrange the provision of a large share of public services. In recent years, their spending and debt has been increasing steadily, especially because of population ageing and increases in the cost of health care and social...