NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Fiscal Federalism in Europe: Lessons From the United States Experience

Robert P. Inman, Daniel L. Rubinfeld

NBER Working Paper No. 3941
Issued in December 1991
NBER Program(s):   PE

The existing political and legal institutions of fiscal policy-making are under challenge. As the United States and the eastern European and Soviet states experiment with policy decentralization, the states of western Europe are looking to a more centralized policy structure via the E.E.C.. This paper seeks to raise issues of importance to all such reform efforts--notably, the need to consider, and balance, the inefficiencies of fiscal policy decentralization (spillovers and wasteful fiscal competition) against the inefficiencies of fiscal policy centralization (policy cycles and localized 'pork barrel' spending and taxes). The need to develop new fiscal policy institutions emphasizing voluntary agreements and responsive 'agenda-setters' is stressed.

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Document Object Identifier (DOI): 10.3386/w3941

Published: European Economic Review, Vol. 36, 1992, 654-660.

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