Fiscal Federalism, Fiscal Consolidations and Cuts in Central Government Grants: Evidence from an Event Study

48 Pages Posted: 5 Nov 2004

See all articles by Anton Muscatelli

Anton Muscatelli

University of Glasgow - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Julia Darby

University of Strathclyde, Glasgow - Strathclyde Business School - Department of Economics

Graeme Roy

University of Glasgow

Date Written: October 2004

Abstract

In this paper we examine financial interactions between tiers of government. Whilst most existing empirical evidence has focused on the US, it is difficult to generalize conclusions obtained to countries where the position and remit of lower tiers of government is evolving or is less clear constitutionally. Applying event study methodology to a dataset covering 15 countries we examine the timing, extent and composition of fiscal changes around consolidation attempts and central government grant cuts. Highlighting the participation of central and sub-central tiers of government, our analysis also sheds light on key outcomes, including decentralized service provision and macroeconomic adjustment.

JEL Classification: E62, E65, H11, H77

Suggested Citation

Muscatelli, Vito Anton and Darby, Julia and Roy, Graeme, Fiscal Federalism, Fiscal Consolidations and Cuts in Central Government Grants: Evidence from an Event Study (October 2004). Available at SSRN: https://ssrn.com/abstract=614843 or http://dx.doi.org/10.2139/ssrn.614843

Vito Anton Muscatelli (Contact Author)

University of Glasgow - Department of Economics ( email )

Adam Smith Building
Glasgow, Scotland G12 8RT
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Julia Darby

University of Strathclyde, Glasgow - Strathclyde Business School - Department of Economics ( email )

Sir William Duncan Building
130 Rottenrow
Glasgow, G4 0GE
United Kingdom

HOME PAGE: http://www.economics.strath.ac.uk/julia/

Graeme Roy

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom

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