Around the world state and local governments have an important and growing role in the provision of public infrastructure services. Subnational governments presently account for an average of 63 percent of public fixed capital formation in OECD countries and approximately for 40 percent in...

Despite the extensive international experience with the assignments of revenue sources to different levels of government, the public finance literature still lacks a general theory of revenue assignments. Two sets of arguments have been separately developed in the literature to explain and guide...

Canada is not a country with a reputation for bold experimentation. However, Canadian experience demonstrates conclusively that an invoice-credit, destination-based value-added tax (VAT) is workable at the subnational level, with both federal and provincial governments retaining full control...

This study develops a dynamic general equilibrium model, applied to Pakistani data, in which optimizing agents evade taxes by operating in the underground economy. The cost to firms of evading taxes is that they find themselves subject to credit rationing from banks. Our model simulations show...

This paper examines the Stackelberg equilibrium for public input competition and compares it with the non-cooperative Nash equilibrium. Given two asymmetric regions, we show that under the Nash equilibrium, the more productive region tends to spend more on public input, which results in this...

China has been carrying out a significant fiscal decentralization policy for over three decades. However, reforms have largely concentrated on the revenue side of budgets, and generally they have not been coordinated with an explicit strategy for the decentralization of expenditure assignments....

The revenue objective to cover the identifiable costs (in full or partly) is important with respect to both fees and charges. All revenue sources -- taxes, fees, fines and user charges -- are instruments of cost recovery to meet the financial obligations of public administration and the public...

The main questions addressed in this paper are the identification of the main determinants of jurisdictional fragmentation as presently observed across countries and how well those findings line up with the predictions of the expanded standard model of optimal jurisdiction size. To our...

All in all, in this paper we argue that disparities in the availability of and need for capital infrastructure matters for fiscal equity. However, we believe that a proper discussion of this topic should be framed in terms of the incidence of outputs and outcomes of public services produced with...

The main transfer instrument from the central governments to local government units (LGUs) in the Philippines, the IRA (Internal Revenue Allotment), introduced in 2001, has been criticized for two main failings: its inability to equalize sufficiently, especially regarding the poorer...