Bulletin n. 2-3/2012
October 2012-February 2013
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Pratibha Agarwal
    Federal Fiscal Transfers: Theories and Contestations
    in Indian Journal of Federal Studies , 24th Issue, 2/2011 ,  2012 ,  60-74
    As opposed to a system of direct involvement of the central government in local service delivery, a system of formal inter-governmental grants distorts the tax effort or expenditure decisions of the local government. The incentives built into the transfer system determine the nature and extent of such budgetary effects. While in the earlier theorization of the impact of grants “flypaper effect” commanded greater attention, the dominant concern of the second-generation theories is equity and efficiency. Recent theories examine the role of federal transfers vis-à-vis these issues using principal-agent and game theory models. The paper observes that there is plethora of methodological, empirical and conceptual issues that need to be settled while analyzing the federal fiscal relations in Indian economy.
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