In this study, we analyze the cyclicality of fiscal policies in China during the period 1978-2013. We find that the cyclicality of local government spending in China significantly affects the cyclicality of total government spending. By employing both time-series and province-level panel data,...

The literature on horizontal tax interdependencies offered limited attention to the interactions on administrative policies although they play an important role in determining the total tax revenues collected. The incentive for sub-central tax authorities to share relevant taxpayer-specific...

There is a rich literature analyzing the problems that will arise as the share of elderly and retired in the population increases in the near future. However, the locational decisions among the elderly as well as their implications in terms of taxes/transfers and of allocation of...

Recent literature on optimal nonlinear taxation has shown that in models with a single level of government public provision of private goods can help redistribution by mitigating self-selection constraints. The aim of the present paper is to extend the analysis to a fiscal federalism setting...

When investigating the effects of federal grants on the behavior of lower-level governments, it is hard to defend the handling of grants as an exogenous factor affecting local governments; federal governments often set grants based on characteristics and performance of local governments. In this...

We analyze a model where the federal government provides risk sharing arrangements to municipalities investing in a local public good. The risk sharing arrangements are an income equalization system and a system allowing for a soft budget constraint, i.e., a bailout. Our main result is that a...

This paper studies the historical origins of the federalist institutions in Mexico and Brazil. Using a bargaining game model, I argue that the type of commodities each country produced by the end of the nineteenth Century determined the negotiation power of local governments. This led to the...

Fiscal federalism in Germany is characterized by lacking sub-national tax autonomy and intensive fiscal equalization. Due to a sunset clause, the current equalization system has to be renegotiated by the year 2019. Against this backdrop, this contribution studies the reform preferences of...

This project examines fiscal reforms in Brazil since the 1990s, particularly in taxation, budgeting, and fiscal federalism. While recentralizing fiscal authority and massively expanding the extractive capacity of the state, policymakers chose not to revamp an inefficient tax system that has...

The article concerns issues of fiscal federalism in the broadest sense. It analyzes both the political causes and the economic consequences of interregional and international grants. Examples from Germany and from the European Union are considered.