We study the tension between fiscal decentralization and progressive taxation. We present a multi-community model in which households differ in incomes and housing preferences and in which the local income tax rate is a function of an exogenous progressive tax schedule and an endogenous local tax shifter. The progressivity of the tax schedule induces a self-sorting process that results in subst...

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This paper surveys the state of fiscal federalism in India, in the broader context of decentralization. We begin with an overview of the basic features and recent developments in intergovernmental fiscal relations, including the role of political institutions, the specifics of legislative and budgetary autonomy, assignments of expenditure responsibility and revenue authority, revenue collection...

Fiscal Decentralization in Asia Challenges and Opportunities This publication discusses the decentralization issues faced by countries of Asia and the Pacific. It includes practical suggestions on how to proceed in this area to achieve economic growth, macroeconomic stability, poverty and income distribution, services delivery improvements, and political accountability. This note elaborates on ...

The traditional economic case for decentralised fiscal choice is based on the welfare gains from an improved allocation of resourceswithin the public sector. Fiscal decentralizationallows individualjurisdictions(I shall refer to them as «local governments») to tailor the levels of local public outputs to the particular tastes and other circumstances that characterizetheir respective communities...

It is a great honor for me to participate in this conference. During my presentation, I would like to focus on the links between decentralization and governance. My remarks are based on my experience as a World Bank economist providing policy advice to countries of Eastern Europe, in particular Hungary. Furthermore I will draw on recent research on decentralization in which I participated (Deth...