How Should Subnational Government Borrowing Be Regulated? Some Cross-Country Empirical Evidence

March 1, 2005

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Alexander Plekhanov, and Raju J Singh. How Should Subnational Government Borrowing Be Regulated? Some Cross-Country Empirical Evidence, (USA: International Monetary Fund, 2005) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Countries have adopted various institutional responses to subnational government borrowing. Using a sample of 44 countries 1982-2000, this paper provides a panel data analysis to determine the most effective borrowing constraints for containing local fiscal deficits. The results suggest that no single institutional arrangement is superior under all circumstances. The appropriateness of specific arrangements depends upon other institutional characteristics, particularly the degree of vertical fiscal imbalance, the existence of any bailout precedent, and the quality of fiscal reporting.

Subject: Budget planning and preparation, Expenditure, Fiscal policy, Fiscal stabilization, Fiscal stance

Keywords: Government, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2005/054
Stock No:

WPIEA2005054
ISBN:

9781451860733
ISSN:

1018-5941

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