Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/161471
Authors: 
Barrios Cobos, Salvador
Martínez-López, Diego
Year of Publication: 
2016
Series/Report no.: 
ADBI Working Paper Series 595
Abstract: 
Examining the cases of Canada, Germany, and Spain, the role played by fiscal equalization schemes in determining subnational borrowing was analyzed, and the link between regional governments' primary fiscal balances and gross domestic product per capita was tested econometrically. The study results show that either poor or rich regions can display higher regional public borrowing on average, and these results can be linked to the institutional design of regional equalization systems in place. Particular elements, such as tax efforts and fiscal capacities, also play relevant roles in this regard. Reforms of these schemes can therefore prove instrumental in reducing regional heterogeneity in public borrowing.
Subjects: 
Fiscal equalization schemes
government borrowing
public borrowing
subnational borrowing
fiscal capacity
Canada
Germany
Spain
JEL: 
R5
H7
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
Document Type: 
Working Paper

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