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Title:Local fiscal equalization in Estonia : is a reform necessary? PDF Logo
Authors:Friedrich, Peter
Nam, Chang Woon
Reiljan, Janno
Issue Date:2009
Series/Report no.:CESifo working paper 2800
Abstract:Estonian municipalities should perform a broad range of functions, while their fiscal resources are often limited and large disparities in fiscal capacity prevail among them. Moreover, the power to regulate fiscal affairs is mostly in the hands of the central government. We discuss how a strict application of the connexity principle can protect municipalities from the fiscal bottleneck. We also recommend the introduction of the principle of parallelism and investigate its effects on the unconditional, down-flow grant system in Estonia. In particular the procedure of determining the total sum of block grants appears to be changed.
Subjects:fiscal equalization
municipal finance
connexity
principles of parallelism
Estonia
JEL:H27
H70
H77
R10
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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