On the Implementation of Transfers to Subnational Governments
IMF Working Papers, June 1, 2005
Source details
- Canonical URL
- On the Implementation of Transfers to Subnational Governments
Other formats
Bibliographic details
- Authors: Bob Searle, Ehtisham Ahmad
- Published: June 1, 2005
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451861495.001
Overview
- Examines a typology of grants used across the world and situates these within the overall constitutional and legal framework for a country.
- Assesses options for grants given the need to maintain overall macroeconomic stability, efficiency in the use of scarce resources, and reduced horizontal disparities.
- Evaluates the role of central objectives in a decentralized framework.
- Argues for a comprehensive framework for grants and for a proper institutional framework to manage grants systems.
Key findings and analytical themes
- Typology of grants:
- Identifies different grant types used internationally (as described in the paper) and places them in constitutional and legal contexts.
- Trade-offs and objectives:
- Stresses the need to balance macroeconomic stability, efficient use of scarce resources, and reduction of horizontal disparities when designing transfers.
- Central objectives in decentralized systems:
- Analyzes how central government objectives can be pursued within decentralized frameworks through grant design.
- Institutional requirements:
- Emphasizes the importance of a proper institutional framework to manage grant systems effectively.
Policy recommendations
- Adopt a comprehensive framework for grants that aligns grant typology with constitutional and legal constraints.
- Design grant systems to:
- Maintain overall macroeconomic stability.
- Promote efficiency in the use of scarce resources.
- Reduce horizontal disparities across subnational governments.
- Establish and strengthen institutional arrangements to manage transfers and ensure alignment with central objectives in decentralized settings.