Sub-national Finances and Fiscal Consolidation [E-Book]: Walking on Thin Ice / Camila Vammalle and Claudia Hulbert
Recent crises and national consolidation packages affected sub-national finances. In many OECD countries, central governments introduced reductions in transfers to sub-national governments, and established expenditure and/or deficit objectives to be met by local or regional authorities. Such measure...
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Full text |
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Personal Name(s): | Vammalle, Camila. |
Hulbert, Claudia. | |
Imprint: |
Paris :
OECD Publishing,
2013
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Physical Description: |
50 p. ; 21 x 29.7cm. |
Note: |
englisch |
DOI: |
10.1787/5k49m8cqkcf3-en |
Series Title: |
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OECD Regional Development Working Papers ;
2013/02 |
Keywords: |
Urban, Rural and Regional Development Taxation Governance Finance and Investment |
Recent crises and national consolidation packages affected sub-national finances. In many OECD countries, central governments introduced reductions in transfers to sub-national governments, and established expenditure and/or deficit objectives to be met by local or regional authorities. Such measures have reduced the financial room of sub-national governments for implementing key public services or investments. In parallel, borrowing conditions deteriorated for many sub-national governments, as banks and financial markets became increasingly reluctant to lend. Since late 2008, financial markets started discriminating between high- and low-quality SNG bonds, and yields reached record-high levels for sub-national governments perceived as less creditworthy. Facing degraded finances, upward pressure on expenditures and deteriorated borrowing conditions, many sub-national governments have used public investment as an adjustment variable to reduce their budget deficits and preserve their spending on welfare, health or education. However, such policies may hinder long-term growth perspectives. |