Decentralization and the Challenge of Hard Budget Constraints

Rodden, Jonathan

World Bank, Washington, DC

关键词: DECENTRALIZATION IN GOVERNMENT;    BUDGETS;    SUBNATIONAL GOVERNMENT;    FINANCIAL INSTITUTIONS ACCOUNTABILITY;    ACCOUNTING;   

RP-ID  :  21597

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Since the early 1980s fiscal andpolitical decentralization have spread around the world. Butdecentralization can encourage dangerous opportunisticbehavior by state and local officials. Left unrestricted,such opportunism can undermine macroeconomic stability andother objectives. The most pressing manifestation of thisproblem is the softening of subnational budget constraints.The impact of decentralization on public sector efficiencyand macroeconomic stability depends on a country'sability to prevent lower-level governments from passing ontheir liabilities to higher-level governments. This notedraws on 11 countries to identify institutional factorsassociated with hard and soft budget constraints and extractpolicy lessons for other countries.