Addressing Local Fiscal Disparities

Tracy M. Gordon

in The Oxford Handbook of Urban Economics and Planning

Published in print December 2011 | ISBN: 9780195380620
Published online September 2012 | | DOI:

Series: Oxford Handbooks

 Addressing Local Fiscal Disparities

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The United States is considered a highly decentralized country. More recently, American federalism has been in a state of flux. At the same time, decentralization has been on the rise internationally. Taken together, experiences in the United States and internationally point to some inherent tensions in federalism. This article argues that such concerns have prevented the adoption of an enduring state fiscal equalization program in the United States. Nevertheless, recent federal stimulus legislation may point to some ways forward. The article reviews the theory of fiscal federalism and its implications for intergovernmental grant programs. It also examines the evolution of intergovernmental transfers in the U.S. federalist system. Following this, the article evaluates design issues for any state fiscal equalization program. Finally, it suggests that there may be a role for ensuring states and localities against financial disaster and suggests future directions.

Keywords: United States; decentralization; state fiscal equalization; fiscal federalism; fiscal equalization

Article.  10184 words. 

Subjects: Economics ; Urban, Rural, and Regional Economics

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