2008/06/01 by Wallace E. Oates · 301 citations
Economics, Econometrics and Finance · Social Sciences · #Download #Economics #Federalism #Fiscal Policies and Political Economy #Fiscal Policy and Economic Growth #Fiscal federalism #Law #Law and economics #Local Government Finance and Decentralization #Political science #Politics
paper · doi:10.17310/ntj.2008.2.08
published in National Tax Journal 61(2), 313-334 (University of Chicago Press)
openalex publication_date 2008/06/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/04
In this paper, I want to review this evolution of the theory of fiscal federalism and offer some thoughts on the implications of these new views for the structure and functioning of federal fiscal systems. This will provide an opportunity to draw on the comparative experience of certain countries, an experience that provides some valuable lessons for intergovernmental fiscal behavior. This will also provide a context for a re–examination of one of the basic instruments of federal finance: intergovernmental grants. These grants have, in principle, a basic role to play in fiscal federalism, but, as the literature has made clear, they have been the source of some serious malfunction in federal fiscal systems. Finally, I want to explore briefly the development and spread of some relatively recent fiscal institutions (such as "rainy–day funds") that have helped to improve the performance of state and local governments.