This paper argues that both horizontal and intertemporal competition among recipient governments are needed in order to ensure incentives for effective utilization of targeted transfers. This has implications for budgeting frameworks and the types of information needed that might be amenable to...

The value-added tax (VAT) in China has the unusual feature that capital goods are included in the VAT base. In addition, most services are subject to the business tax, which is not creditable against VAT, but which accrues to local governments, and operates as a turnover tax. On grounds of...

Full implementation of an intergovernmental transfer system based on revenue capacities and expenditure needs could significantly improve both redistribution and equity objectives of the Chinese authorities. This was envisaged in the 1994 fiscal reforms, but the authorities were unable to...

A weakness of decentralization and overall tax reforms in Latin America is the lack of attention to adequate taxation at the subnational government. A reliance on shared taxes with extensive earmarking leads to weak subnational accountability and soft budget constraints. The paper explores the...

The process of decentralization in Indonesia was initiated after a long period of autocratic rule. Despite the political imperatives, there is a need to carefully sequence the fiscal decentralization to ensure that financing follows the assignment of functions. The functions should be...

Intergovernmental equalization grants have been described as the glue that holds a nation together. Getting the grants system right is critical to countries as they decentralize. This paper illustrates general principles with an example based on Indonesia in 2000. A general grant should be used...

This book collects high-quality papers on issues related to the rebalancing strategy in China, new clean cities as “hubs’’, liability management, and involving the private sector, including through PPPs, with specific examples from Guangdong. Guangdong has been at the forefront of economic...

pt. I. Managing subnational liabilities in Europe --pt. II. Incipient problems in the biggest countries in Europe -- pt. III. The troubled countries of southern Europe -- pt. IV. Cities, the olympics and growth -- pt. V. Accession states -- pt. VI. Some general lessons.

This paper discusses the efforts by the Government of Pakistan to implement a General Sales Tax (GST). First, a history of Pakistani tax reform efforts is presented along with the reforms recommended by the National Taxation Reforms Commission. After this, the design and implementation of the...

Peru represents a laboratory for examining the different approaches to the centralized or decentralized delivery of public services over the past quarter of a century. There is a renewed and increasing interest in decentralization in Peru as a mechanism to generate more involved decision making...