BEYOND GAPS AND IMBALANCES: RE-STRUCTURING THE DEBATE ON INTERGOVERNMENTAL FISCAL RELATIONS
Article first published online: 6 JUL 2011
© 2011 The Author. Public Administration © 2011 Blackwell Publishing Ltd
Volume 90, Issue 1, pages 99–128, March 2012
How to Cite
SHARMA, C. K. (2012), BEYOND GAPS AND IMBALANCES: RE-STRUCTURING THE DEBATE ON INTERGOVERNMENTAL FISCAL RELATIONS. Public Administration, 90: 99–128. doi: 10.1111/j.1467-9299.2011.01947.x
- Issue published online: 20 MAR 2012
- Article first published online: 6 JUL 2011
- Date received 10 May 2010. Date accepted 18 November 2010.
How do we know whether a country suffers from vertical fiscal imbalance (VFI)? What should be done about it? Academic appreciation of these issues in general, and the nature of political behaviour in particular, both have major implications for the way federations are fiscally structured. While the latter clearly is a problem of political negotiations, our focus is on the former, that is, conceptual clarity, which precedes meaningful negotiations. Thus, the paper aims to clarify the multiple usages of the symbolically loaded terms VFI and VFG (vertical fiscal gap) by critically engaging the fundamental assumptions and premises underlying these ostensibly similar notions. It proposes an alternative conceptual framework and introduces the concepts of vertical fiscal asymmetry (VFA) and vertical fiscal difference (VFD) that have the potential to better structure public debate on issues of vertical fiscal relations and stimulate a sensible appreciation of the problem and possible remedies.