Fiscal Federalism in Europe: Lessons from the United States Experience

16 Pages Posted: 3 May 2004

See all articles by Robert P. Inman

Robert P. Inman

University of Pennsylvania - Finance Department; National Bureau of Economic Research (NBER)

Daniel L. Rubinfeld

University of California at Berkeley - School of Law; National Bureau of Economic Research (NBER); NYU Law School

Date Written: December 1991

Abstract

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.

Suggested Citation

Inman, Robert P. and Rubinfeld, Daniel L., Fiscal Federalism in Europe: Lessons from the United States Experience (December 1991). NBER Working Paper No. w3941, Available at SSRN: https://ssrn.com/abstract=265288

Robert P. Inman (Contact Author)

University of Pennsylvania - Finance Department ( email )

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Daniel L. Rubinfeld

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