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Fiscal Fragmentation in Decentralized Countries

Subsidiarity, Solidarity and Asymmetry Edited by Richard M. Bird, Professor Emeritus, Rotman School of Management and Senior Fellow, Institute on Municipal Finance and Governance, Munk School of Global Affairs, University of Toronto, Canada and Robert D. Ebel, Steen Enterprises, Washington, DC, US
Most countries, developed and developing, are fiscally decentralized with regional and local governments of varying importance. In many of these countries, some of these sub-national governments differ substantially from others in terms of wealth, ethnic, religious, or linguistic composition. This book considers how fiscal arrangements may strengthen or weaken national solidarity and the effectiveness with which public services are provided. In particular, the nation’s ability to cope with changes created by decentralization is explored.
In Association with the International Bank for Reconstruction and Development/The World Bank
Extent: 456 pp
Hardback Price: $184.00 Web: $165.60
Publication Date: 2007
ISBN: 978 1 84542 402 2
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  • Economics and Finance
  • Political Economy
  • Public Sector Economics
  • Politics and Public Policy
  • Political Economy
Most countries, developed and developing, are fiscally decentralized with regional and local governments of varying importance. In many of these countries, some of these sub-national governments differ substantially from others in terms of wealth, ethnic, religious, or linguistic composition. This book considers how fiscal arrangements may strengthen or weaken national solidarity and the effectiveness with which public services are provided. In particular, the nation’s ability to cope with changes created by decentralization is explored.

Through a series of case studies, the countries of Belgium, Bosnia
and Herzegovina, Canada, China, Germany, India, Indonesia, the Philippines, Russia, Spain and Switzerland are examined with an eye to how their public finances are structured and how these arrangements act to promote equilibrium or turmoil in the nation state. This is the first detailed consideration of the link between asymmetry and intergovernmental finance, as well as the first detailed study of how asymmetrical fiscal arrangements work in practice in a variety of different countries.

Policy analysts concerned with intergovernmental finance and/or
political legitimacy issues will find this synthesis of interest, as will readers concerned with the public policy of the many fiscally fragmented countries profiled here.
‘. . . the book is coherent and engaging throughout, with each contributor offering the reader valuable insights into the various forces shaping their chosen country of study. . . this is an important book, which will engage and indeed possibly help to define continuing debates in development studies into the future. . . The authors have produced a book which will be of particular interest to policy analysts looking at intergovernmental finance and to those concerned with political legitimacy and governance, especially in relation to the countries profiled here, though it will also prove useful to those looking at issues around globalization and tools used by institutions such as the World Bank in its promotion.’
– Breffní Lennon, Progress in Development Studies
Contributors: B. Bayenet, R.M. Bird, B. Brodjonegoro, B. Dafflon, P. de Bruycker, R.D. Ebel, J.F.G. Ford, W. Fox, T. Garcia-Milà, S. Gianci, R. Manasan, J. Martinez-Vazquez, T.J. McGuire, M.G. Rao, S. Sehili, N. Singh, P.B. Spahn, F. Vaillancourt, C. Wallich, J. Werner, C. Wong
Contents:

Preface

PART I: INTRODUCTION
1. Subsidiarity, Solidarity and Asymmetry: Aspects of the Problem
Richard M. Bird and Robert D. Ebel

2. The Country Studies: Comparisons and Conclusions
Richard M. Bird, Robert D. Ebel and Sebastiana Gianci

PART II: FEDERAL INDUSTRIAL COUNTRIES
3. Reconciling Diversity with Equality: The Role of Intergovernmental Fiscal Arrangements in Maintaining an Effective State in Canada
Richard M. Bird and François Vaillancourt

4. Germany at the Junction Between Solidarity and Subsidiarity
Paul Bernd Spahn and Jan Werner

5. Accommodating Asymmetry Through Pragmatism: An Overview of Swiss Fiscal Federalism
Bernard Dafflon

PART III: NEW FEDERAL COUNTRIES
6. Belgium: A Unique Evolving Federalism
Benoît Bayenet and Philippe de Bruycker

7. Fiscal Decentralization in Spain: An Asymmetric Transition to Democracy
Teresa Garcia-Milà and Therese J. McGuire

PART IV: COUNTRIES IN TRANSITION
8. Asymmetric Federalism in Russia: Cure or Poison?
Jorge Martinez-Vazquez

9. Ethnic Minority Regions and Fiscal Decentralization in China: The Promises and Reality of Asymmetric Treatment
Christine Wong

PART V: DEVELOPING COUNTRIES
10. Asymmetric Federalism in India
M. Govinda Rao and Nirvikar Singh

11. Intergovernmental Fiscal Relations and State Building: The Case of Indonesia
Bambang Brodjonegoro and J. Fitz G. Ford

12. Subsidiarity and Solidarity: Fiscal Decentralization in the Philippines
Christine Wallich, Rosario Manasan and Saloua Sehili

PART VI: POSTCONFLICT
13. Fiscal Federalism in Bosnia and Herzegovina: Subsidiarity and Solidarity in a Three-Nation State
William Fox and Christine Wallich

Index