The influence of decentralized taxes and intergovernmental grants on local spending volatility. Issue 4 (3rd April 2017)

• Record Type: Journal Article
• Authors: Sacchi, Agnese; Salotti, Simone
• Is Part Of: Regional studies. Volume 51:Issue 4(2017)
• Page Start: 507
• Page End: 522
• Publication Date: 2017-04-03
• Subjects: local spending volatility -- local revenues -- property taxes -- intergovernmental grants; 地方支出波动 -- 地方税收 -- 财产税 -- 跨政府补助; volatilité des dépenses locales -- ressources fiscales locales -- impôts fonciers -- subventions intergouvernementales; volatilität der kommunalen ausgaben -- kommunale einnahmen -- grundsteuer -- regierungsübergreifende subventionen; volatilidad del gasto local -- ingresos locales -- impuestos inmobiliarios -- subvenciones intergubernamentales; E62 -- H71 -- H77 -- R50; Regional planning -- Periodicals; Regional planning -- Great Britain -- Periodicals; 307.14
• DOI: 10.1080/00343404.2015.1111512
• Languages: English
• ISSNs: 0034-3404

Abstract

ABSTRACT: The influence of decentralized taxes and intergovernmental grants on local spending volatility. Regional Studies . This paper studies what affects the volatility of sub-central public spending in 20 Organisation for Economic Co-operation and Development (OECD) countries. The evidence based on data from 1972 to 2007 shows that the volatility of intergovernmental grants from upper levels is positively associated with the volatility of local expenditure. On the other hand, the volatility of local tax revenues – mainly that of property taxes – exerts the opposite effect. These findings suggest that making local governments rely more on grants than own tax revenues adversely affects their spending stability. Allowing them to levy autonomously taxes relying on responsive tax bases provides incentives to smooth their expenditure.