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Transition to Market and Normative Framework of Fiscal Federalism

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  • M.Govinda Rao

Abstract

This paper deals with the challenges of fiscal federalism in planned economies. Planned economies through their various policy instruments to control the resource allocation introduce several sources of distortion and inequity by way the budgets are determined, the determination of administered prices, impediments to internal trade and movement of labour and capital, closed nature of the economy and commanding heights role assigned to the public sector. Thus, fiscal federalism in these countries ceases to be an efficient institutional arrangement. On the policy side reforms in fiscal federalism in developing countries are inextricably intertwined with privatistion, planning and budgeting, reforms in administered price mechanism, various regulations relating to the movement of factors and products, besides the issues discussed in fiscal federalism. Any attempt to look at the issues in isolation will make the reforms less potent and ineffective.

Suggested Citation

  • M.Govinda Rao, 2006. "Transition to Market and Normative Framework of Fiscal Federalism," Working Papers id:367, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:367
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    References listed on IDEAS

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    Cited by:

    1. Daniel Artana & Sebastian Auguste & Marcela Cristini & Cynthia Moskovitz & Ivana Templado, 2012. "Sub-National Revenue Mobilization in Latin American and Caribbean Countries: The Case of Argentina," Research Department Publications 4765, Inter-American Development Bank, Research Department.

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