Ehtisham Ahmad

The theory of reform and indian indirect taxes

Abstract Given a set of value judgements, an initial state, and a model of the economy, one can ask whether some feasible tax change would increase welfare. We do this by defining the marginal cost in terms of welfare of raising an extra rupee from the i th good. The inverse optimum problem is the calculation of non-negative welfare weights on households which imply that the initial state is optimum. If no such welfare weights exist, then a Pareto improvement is possible. We illustrate the concepts and results using data from the Indian economy for 1979–1980. Directions of tax reform for a number of specific social welfare functions and for Pareto improvements are presented.

Handbook of Fiscal Federalism

Contents:Foreword Introduction: Fiscal Federalism - A Review of Developments in the Literature and PolicyEhtisham Ahmad and Giorgio BrosioPART I: APPROACHES TO FISCAL FEDERALISM1. The Political Economy of DecentralizationBen Lockwood2. Horizontal Competition Among GovernmentsPierre Salmon3. Modelling Vertical CompetitionAlbert Breton4. Spatial Interactions Among GovernmentsFrederico Revelli5. Asymmetric Federalism and the Political Economy of DecentralizationRoger D. Congleton6. Functional, Overlapping and Competing Jurisdictions (FOCJ): A Complement and Alternative to Today?s FederalismReiner Eichenberger and Bruno S. Frey7. Contract FederalismPaul Bernd SpahnPART II: DECENTRALIZATION AND DEVELOPMENT8. Decentralization and DevelopmentPranab Bardhan9. Fiscal Federalism in Planned EconomiesGovinda Rao 10. Decentralization and Service DeliveryJunaid Ahmad, Shantayanan Devarajan, Stuti Khemani and Shekhar ShahPART III: IMPLEMENTING MULTILEVEL FISCAL SYSTEMS11. The Assignment of Functions to Decentralized Government: From Theory to Practice Bernard Dafflon12. Normative Versus Positive Theories of Revenue Assignments in Federations Maria Flavia Ambrosiano and Massimo Bordignon13. Tax Competition in a Federal SettingJohn D. Wilson14. Intergovernmental Redistributive Transfers: Efficiency and EquityRobin Boadway15. On the Implementation of Transfers to Subnational GovernmentsEhtisham Ahmad and Bob Searle16. Subnational Public Financial Management: Institutions and Macroeconomic Considerations Ehtisham Ahmad, Maria Albino-War and Raju SinghPART IV: EMERGING ISSUES17. The Assignment of Revenue from Natural ResourcesGiorgio Brosio18. Decentralization and the EnvironmentSilvana Dalmazzone19. Corruption and Decentralized Public GovernanceAnwar Shah20. Fiscal Federalism and National UnityRichard M. Bird and Robert D. Ebel21. Institutions of Federalism and Decentralized GovernmentBrian GalliganIndex

Does Decentralization Enhance Service Delivery and Poverty Reduction

Does decentralization enhance service delivery and poverty reduction? Drawing on cutting edge research, expert contributors address this fundamental question facing policy-makers in developing as well as advanced countries. This timely book builds upon insights on the recent developments in the intergovernmental literature first outlined in the Handbook of Fiscal Federalism. New empirical evidence from across the globe is presented: policy-oriented chapters evaluate fiscal federalism with an emphasis on the effectiveness of decentralized service delivery, the decentralization process in different parts of the world is appraised, and specially commissioned research focuses on the political economy process and the outcomes of the decentralization process. The role of international agencies, as explicit donors, is examined in several chapters.

Managing fiscal decentralization

Part 1: General Themes Part 2: The European Union Part 3: Transition Economies Part 4: Developing Countries

Oil Revenue Assignments: Country Experiences and Issues

Based on country experiences, the paper assesses policy options to assign oil revenues to subnational governments (SNGs). The literature recommends that oil revenues be centralized. Given political economy considerations, this paper suggests that a possible alternative is to assign stable oil-tax bases to oil-producing SNGs, supplementing these with predictable transfers from the center. Although commonly used, oil revenue-sharing arrangements are the least preferable solution, as they complicate macroeconomic management and do not provide stable financing. Revenue sharing also does not diffuse separatist tendencies, since oil-producing SNGs would still be better off by keeping their oil revenues in full.

Local Service Provision in Selected OECD Countries: Do Decentralized Operations Work Better?

There is a widespread presumption that decentralization improves public service provision. This has led to policy prescriptions that are assiduously adhered to by countries and international. This paper reviews the recent evidence from OECD countries - which is seen to be inconclusive. This suggests the need for a careful design of programs that take into account the political economy constraints and incentives, as well as more systematic and thorough evaluations of outcomes.

Subnational Public Financial Management: Institutions and Macroeconomic Considerations

Transparent public financial management at the subnational level requires institutions and processes that mirror those needed at the central government level, in order to generate better accountability and competition among different subnational governments, critical elements in ensuring good governance and efficiency of decentralized administrations. Further subnational debt also has implications for overall macroeconomic stability that concerns the central government. The key components are identified, with a particular focus on subnational debt monitoring and management.

Indonesia: Managing Decentralization

The process of decentralization in Indonesia was initiated after a long period of autocratic rule. Despite the political imperatives, there is a need to carefully sequence the fiscal decentralization to ensure that financing follows the assignment of functions. The functions should be commensurate with the capacity to provide public services. The paper argues for the proper sequencing to avoid jeopardizing macroeconomic stability or the effective delivery of public services.

On the Implementation of Transfers to Subnational Governments

This paper examines a typology of grants that are used across the world, and places these in the context of the overall constitutional and legal framework for a country. It looks at the options for grants, given the need to maintain overall macroeconomic stability, efficiency in the use of scarce resources as well as reduced horizontal disparities. The role of central objectives in a decentralized framework is also assessed. The paper argues for a comprehensive framework for grants, as well as a proper institutional framework to manage grants systems.

Handbook of Multilevel Finance

This Handbook explores and explains new developments in the “second generation” theory of public finance, in which benevolent rulers and governments have been replaced by personally motivated politicians and the associated institutions. Following a comprehensive introduction by the editors, the renowned contributors present fresh and original perspectives on the key multi-level issues, along with recent developments in theory and practice, as they relate to taxes, budget systems, the management of liabilities and macroeconomic stability. The book also explores special issues concerning the poor and marginalized, structural change and the environment, natural disasters, and the task of overcoming conflicts whilst keeping countries together.