Incentives facing local governments in the absence of credible enforcement

Abstract

‘Are fiscally decentralized countries inherently more unstable? Or is it a question of the design of decentralization, requiring, for example, higher subnational revenue autonomy and hard budget constraints? The ongoing euro crisis offers an assortment of relevant country case studies to test some of those important propositions. This volume provides authoritative and insightful assessments of how decentralization and macroeconomic stability relate to each other, and significantly contributes to our understanding of multi-level finance and to improving decentralization design.’ – Jorge Martinez-Vazquez, Georgia State University, US