Book contents
- Frontmatter
- Contents
- Preface
- PART ONE DESIGNING FISCAL CONSTITUTIONS
- 1 Introduction to Federalism and the Role of Governments in Federal Economies
- 2 The Decentralization of Government Authority
- 3 Expenditure Assignment
- 4 Revenue Assignment
- 5 Natural Resources Ownership and Management in a Federal System
- 6 Local Governance in Theory
- 7 Local Governance in Practice
- PART TWO REVENUE SHARING AND FISCAL TRANSFERS
- PART THREE FINANCE AND PROVISION OF PUBLIC SERVICES
- PART FOUR CHALLENGES AND RESPONSES
- References
- Index
3 - Expenditure Assignment
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Preface
- PART ONE DESIGNING FISCAL CONSTITUTIONS
- 1 Introduction to Federalism and the Role of Governments in Federal Economies
- 2 The Decentralization of Government Authority
- 3 Expenditure Assignment
- 4 Revenue Assignment
- 5 Natural Resources Ownership and Management in a Federal System
- 6 Local Governance in Theory
- 7 Local Governance in Practice
- PART TWO REVENUE SHARING AND FISCAL TRANSFERS
- PART THREE FINANCE AND PROVISION OF PUBLIC SERVICES
- PART FOUR CHALLENGES AND RESPONSES
- References
- Index
Summary
THE CASE FOR DECENTRALIZATION
In Chapter 2, we outlined the general principles of expenditure assignment and discussed in general terms the kinds of responsibilities that could be decentralized to the states. In this chapter, we consider expenditure assignment in more detail. The application of the general principles to specific types of expenditure functions is discussed, as well as some additional problems that arise in coordinating state provision of expenditure programs with national objectives.
It might be worth briefly recalling and summarizing the key arguments for decentralization of expenditures to put the following discussion into context. The following arguments constitute the case for decentralizing expenditure responsibilities. These have also been briefly discussed in earlier chapters.
Catering to Regional Preferences and Needs
The classic argument for decentralization (Oates, 1972) is that different states have different demands for types and levels of public goods and services. This variation may simply come from personal preferences of the residents themselves, perhaps arising from cultural differences or other sources of heterogeneity across states. Or it may come from more objective factors such as geographic differences (e.g., terrain, population density), demographic differences (age structure of the population), or relative price or cost differences.
- Type
- Chapter
- Information
- Fiscal FederalismPrinciples and Practice of Multiorder Governance, pp. 124 - 156Publisher: Cambridge University PressPrint publication year: 2009