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Theory of Fiscal Federalism: An Analysis

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  • Prakash Chandra, Jha

Abstract

The recent scholarship has made distinction between two generation of literature in fiscal federalism. The study has critically analysed the first generation theory and second generation theory of fiscal federalism. Though the later approaches the problem of fiscal federalism from different perspective, it does not challenge but complements the former. The paper argues that second generation theory is an ongoing effort to build a theory in response to fiscal challenges facing a number of countries. In brief, it is aimed at explaining present-day institutional arrangements which can no longer be adequately explained by employing the first generation theory.

Suggested Citation

  • Prakash Chandra, Jha, 2012. "Theory of Fiscal Federalism: An Analysis," MPRA Paper 41769, University Library of Munich, Germany, revised 06 Oct 2012.
    • Handle: RePEc:pra:mprapa:41769
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    References listed on IDEAS

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    5. Wallace E. Oates & Wallace E. Oates, 2004. "An Essay on Fiscal Federalism," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 22, pages 384-414, Edward Elgar Publishing.
    6. Weingast, Barry R, 1995. "The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 11(1), pages 1-31, April.
    7. Jin, Hehui & Qian, Yingyi & Weingast, Barry R., 2005. "Regional decentralization and fiscal incentives: Federalism, Chinese style," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1719-1742, September.
    8. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June.
    9. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, September.
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    Cited by:

    1. Tamayo, Adrian, 2017. "Assignment of powers and number of states in Federal Philippines Discussion paper on federalizing Philippines," MPRA Paper 79545, University Library of Munich, Germany.
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    More about this item

    Keywords

    Fiscal Federalism; Decentralisation; First Generation Theory; Second Generation Theory;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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