This paper investigates the effects of fiscal equalization grants on total expenditure and disaggregated expenditures by exploiting two different formula-based exogenous variations in grants. Examining the institutional settings of the Japanese fiscal equalization scheme and estimating local...

While the literature on how intergovernmental grants affect the budget of receiving jurisdictions is numerous, the very few studies that explicitly deal with likely endogeneity problems focus on grants targeted towards specific sectors or to specific type of recipients. The results from these...

In response to the current fiscal crisis, the Government of Romania has amended the law governing local government finance. The amendments are largely aimed at restraining local government staffing and curtailing arrears. They require somewhat onerous administrative measures. This report argues...

I develop and test a new explanation for the variation in slack resource levels. That explanation is based on the "ratcheting" dynamic, or the claim that government budgets expand because past overspending is impounded in future budgeted expenditures. I test the salience of the ratcheting...

This paper examines the causal effect of local government spending on labor markets in a developing country. We use plausibly exogenous variation in the allocation mechanism of federal funds at the municipality level in Brazil to estimate the effect of general spending on formal employment. We...

Zimbabwe is at a critical juncture. After dollarization and favorable economic factors fueled arecovery during 2009-12, Zimbabwe today faces slowing growth, a financial crisis, increasingly erratic weather patterns and rising poverty and inequality. To help respond to these issues, the...