The choice of the"right"fiscal relationship between central, provincial, and local governments depends on how a government weighs the benefits of decentralized economic development policies against the costs of having less effective central fiscal management. Three strong forces justify more...

The typical post-Bretton Woods era development approach that emphasized central government-led development efforts has changed dramatically, and local governments have clearly emerged as players in development policy. The thinking about what is important to achieve in development objectives is...

The author examines the reasons developing countries are reexamining the respective roles of the private sector, civil society, and various levels of government--and considering new fiscal arrangements between national and lower levels of government. Decentralization may be particularly...

Hungary has undertaken a bold and far-ranging reform of its system of subnational finances. This paper outlines the changes introduced in the system of local finance as a result of the 1990 Local Self-Government Act, and the 1990 Act on Local Taxes and provides a preliminary assessment of their...

Colombia's political geography contrasts sharply with its economy. Physical characteristics and guerilla war fragment the country geographically, yet it has a long tradition of political centrism and macroeconomic stability. Recently, with political and economic decentralization, there has been...

The author examines experiences in Indonesia, the Republic of Korea, and Thailand in confronting systemic financial crises during the 1990s. He draws on the knowledge and experience of World Bank staff who managed the Bank's financial and technical assistance to those countries. In reviewing the...

The traditional theory of fiscal federalism assigns the role of macroeconomic stabilization to the federal government. In addition to this long-standing theoretical result, there is empirical observation that federal governments in developing countries typically have cheaper and more stable...

The author examines the many faces of infrastructure decentralization: the costs and benefits, the government structure (constraint or variable?), the"polycentric"approach, and how to make decentralization work (for whom?). He proposes basic principles and guidelines for policy design, for both...

The government of Hungary has contained the main fiscal risks of the transition to a market economy. It has paid off and resolved most problems in the banking and enterprise sectors. Since 1995 it has implemented fiscal adjustment with the objective of long-term fiscal stability rather than an...

Debates about the appropriate role, policies, and institutions of the state are often hampered by the lack of a definition for good government. To provide a quantifiable measure of good government, the authors develop an index for the quality of governance for a sample of 80 countries. They...