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Ensuring Inter-regional Equity and Poverty Reduction

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  • Bert Hofman
  • Susana Cordeira Guerra

Abstract

This paper reviews causes and consequences of fiscal inequities among subnational governments in East Asia. It shows that endowments and fiscal capacities among subnational entities are large, and that these inequities translate into large fiscal inequities prior to equalization. The current transfer systems in East Asian countries are only mildly equalizing, so that even after equalization the remaining fiscal disparities are still large. This paper discusses the possible consequences for service delivery inputs, outputs, and outcomes of these disparities. It concludes by some guidelines on how to make progress in increasing transparency on inequalities at the sub-national level, and how transfer systems can be made more equalizing without undermining the incentives for local governments to raise their own revenues and to spend their resources efficiently.

Suggested Citation

  • Bert Hofman & Susana Cordeira Guerra, 2004. "Ensuring Inter-regional Equity and Poverty Reduction," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0411, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper0411
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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp0411.pdf
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    References listed on IDEAS

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    Cited by:

    1. Martinez-Vazquez, Jorge & Timofeev, Andrey, 2008. "Regional-local dimension of Russia's fiscal equalization," Journal of Comparative Economics, Elsevier, vol. 36(1), pages 157-176, March.
    2. Ms. Era Dabla-Norris, 2005. "Issues in Intergovernmental Fiscal Relations in China," IMF Working Papers 2005/030, International Monetary Fund.

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