A sub-central government perspective on fiscal policy in a tight fiscal environment

Vammalle, Camila; Allain-Dupré, Dorothée; Gaillard, Norbert

doi:10.1787/9789264167001-3-en

Cited by 5 publications

(5 citation statements)

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“…In all of these cases, the fiscal turmoil at the national level was reflected in a spate of subnational debt crises. There is also evidence of significant fiscal stress in many SNGs in advanced countries in the wake of the global financial and Euro crises in recent years (Ahmad and Brosio, 2015;Ter-Minassian and Fedelino, 2010;Vammalle, Allain-Dupre, and Gaillard, 2012).…”

Section: Ifc In Macro-fiscal Managementmentioning

confidence: 99%

Intergovernmental Fiscal Cooperation: International Experiences and Possible Lessons for Brazil

Ter-Minassian¹,

Mello

2016

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work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.http://www.iadb.org 2016 Abstract*To a large extent, policy outcomes are shaped by governance, including institutional arrangements and forums for cooperation among and within different layers of government. In turn, the effectiveness of intergovernmental fiscal cooperation (IFC) is affected by economic, sociopolitical, and institutional factors, including constitutional provisions and power balances among different levels of government. On the basis of a review of large federations, the authors propose options to strengthen IFC in Brazil. In particular, the effectiveness of IFC could be enhanced in Brazil by establishing forums for vertical cooperation between the states and the federal government, and for horizontal cooperation among states.JEL Codes: H11, H77

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Section: Ifc In Macro-fiscal Managementmentioning

confidence: 99%

Intergovernmental Fiscal Cooperation: International Experiences and Possible Lessons for Brazil

Ter-Minassian¹,

Mello

2016

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“…During the 2007-08 global financial crisis of (and in particular, in the wake of the fall of Lehman Brothers in October 2008), credit flows to SNGs perceived as riskier borrowers were temporarily disrupted (Box 3). In contrast, top rated SNGs benefited from a flight to quality and continued to tap international bond markets without major difficulties (Vammalle et al, 2011). 14 Since 2011, this trend has been reinforced: yields of high quality (i.e.…”

Section: Differentiation Between Low and High-risk Sngs Has Increasedmentioning

confidence: 99%

Sub-national Finances and Fiscal Consolidation

Vammalle

Hulbert

2013

OECD Regional Development Working Papers

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Recent crises and national consolidation packages affected sub-national finances. In many OECD countries, central governments introduced reductions in transfers to sub-national governments, and established expenditure and/or deficit objectives to be met by local or regional authorities. Such measures have reduced the financial room of sub-national governments for implementing key public services or investments. In parallel, borrowing conditions deteriorated for many sub-national governments, as banks and financial markets became increasingly reluctant to lend. Since late 2008, financial markets started discriminating between high-and low-quality SNG bonds, and yields reached record-high levels for sub-national governments perceived as less creditworthy. Facing degraded finances, upward pressure on expenditures and deteriorated borrowing conditions, many sub-national governments have used public investment as an adjustment variable to reduce their budget deficits and preserve their spending on welfare, health or education. However, such policies may hinder long-term growth perspectives.

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“…This slight increase may reflect several factors: declines in national spending on GFCF, decentralisation trends in some OECD countries and the nature of the competencies transferred, and for EU countries -renovation and construction needs of public facilities and infrastructure in new member states, an increase in the cost of projects carried out 3 , and increased availability of credit and support from European Structural Funds (Dexia, 2011;Dexia 2012). In the current constrained fiscal climate, public investment is an "adjustment variable" for many OECD countries and SNGs (OECD, 2011e;Vammalle et al, 2012;Vammalle and Hulbert, 2013). From 2007 to 2009, the implementation of recovery plans in many OECD and G20 countries led to higher levels of public investment at both national and sub-national levels.…”

Section: Box 1: Defining and Measuring Public Investmentmentioning

confidence: 99%