fiscal common pool problem

Copyright © 2020 Elsevier B.V. or its licensors or contributors. The purpose of this paper is to reveal the kinds of public investment that create a fiscal common pool problem through municipal mergers in Japan. The authors acknowledge the financial support received from the Japan Society for the Promotion of Science https://doi.org/10.1016/j.eap.2020.07.001. It is generally accepted that the source of the phenomenon lies in the common pool problem, the fact that recipients of public spending to fail to fully internalize the costs that taxpayers must assume. 19H01500), (No. The empirical results show that subordinate … 1970s it tests whether the common pool problem affects the fiscal stance of the municipalities. Published by Elsevier B.V. All rights reserved. These are the common swimming pool problems experienced by pool owners and as a swimmer it is not fun or even safe to swim in a pool with such problems. © 2020 Economic Society of Australia, Queensland. This paper analyses a model in which the minister of finance internalizes the common pool budget’s externality. (1981), from the fact that each spending minister takes into account only a share of that excess burden: the portion that falls on his constituency. Fiscal policy is procyclical in many developing countries. Common Pools — Why a European Fiscal Union will Make Things Worse Prof. Dr. Jürgen von Hagen* The root of excessive deficits and debts is in the lack of proper governance over common pool problems of public finance (Kontopoulos and Perotti (1999), von Hagen and Harden (1995), Weingast, Shepsle, and Johnsen (1981), Wyplosz and Kostrup (2010), Hallerberg, Strauch, and von Hagen (2009)). 1. For example, presidents and finance ministers have more incentives to internalize the aggregate, intertemporal government budget constraint vis a vis other political actors (legislators, spending ministers, governors). if the results hold for You can hire someone to maintain the pool on your behalf or you can enroll in a class and learn how to maintain it. (1981). 18K01662), (No. an irrigation system or fishing grounds), whose size or characteristics makes it costly, but not impossible, to exclude potential beneficiaries from obtaining benefits from its use. Voters observe the state of the economy but not the rents appropriated by corrupt governments. In particular, we focus on whether municipal mergers increase road and public park construction immediately before the mergers because previous papers reveal that municipal mergers increase only local bonds. By Giovanna Bimonte and Pietro Spennati. Journal of Public Budgeting, Accounting & Financial Management. In an integrated national economic and financial space, the costs of fiscal indiscipline by one or more subnational governments (e.g. Only time will tell, but a safe bet is that the future development of IFCs will, to a substantial extent, depend on the country-specific circumstances. In economics, a common-pool resource (CPR) is a type of good consisting of a natural or human-made resource system (e.g. The fiscal common pool problem is related to the free-rider problem, pork-barrel spending, and the law of 1/ n. The literature on the fiscal common pool problem was formalized by Weingast et al. Each of these actors represents specific interests, and faces diverse incentives with respect to fiscal solvency. an increase in interest rates) are likely to spill over to the others. As a result, democratically elected governments are led to postpone tax collection, or to cut spending. The objective of the study is to determine if an over-borrowing bias emerges when the state fiscal base is shared by multiple general-purpose and special-purpose jurisdictions serving different groups of citizens. Some fiscal councils also provide economic forecasting. 20H01504), Grant-in-Aid for Research in Nagoya City University (No. Visit emeraldpublishing.com/platformupdate to discover the latest news and updates, Answers to the most commonly asked questions here. 137-157. https://doi.org/10.1108/JPBAFM-11-2019-0176, Copyright © 2020, Emerald Publishing Limited. Solving the fiscal discipline problem requires internalizing this externality. 17K13752), (No. 32 No. This paper discusses the common-pool problems that arise when multiple territorially overlapping governments share the authority to provide services and levy taxes in a common geographic area. Return to Blog. 2 A This study finds that jurisdictional overlap will increase state government debt, local government debt, as well as combined state and local government debt. The special law is very helpful for subordinate merger partners. In common pool models fiscal outcomes are determined by the decision-making rule that is used to aggregate conflicting interests into a single budget. Shi, Y. and Hendrick, R. (2020), "The problem of the fiscal common-pool: is there an overlap effect on state and local debt? The classic common pool problem in economics is about how the impact of just one fisherman extracting more fish on the amount of fish in the lake is small, but if there are lots of fishermen doing the same we have a problem. Ces ressources sont des biens communs, appelés common-pool resource, qui constituent traditionnellement un problème d'action collective pouvant mener à la surexploitation de la ressource. The empirical results show that subordinate merger partners rapidly increase their road and public park expenses just before mergers. The “common pool” problem is especially problematic to disciplined overall fiscal policy when decentralised fiscal entities can partake in free-rider behaviour, neglecting the impact on the aggregate fiscal position. If you think you should have access to this content, click the button to contact our support team. Typically, councils are staffed by economists and statisticians who do not have the ability to set policy, but provide advice to governments and the public on the economic effects of government budgets and policy proposals. ", Journal of Public Budgeting, Accounting & Financial Management, Vol. Despite all … fiscal rules and the comprehensiveness of the design features in emerging economies has caught up to those in advanced economies; and (iii) the “next-generation” fiscal rules are increasingly complex as they combine the objectives of sustainability and with the need for flexibility in response to shocks, thereby creating new challenges for implementation, communication, and monitoring. Thushyanthan Baskaran () . Coalition governments, cabinet size, and the common pool problem: Evidence from the German states. A first factor is the “common pool” problem. the fiscal common pool problem by increasing both road and public park construction just before their mergers. Fiscal indiscipline is a feature of many developed countries. The list of worries is long, from contaminants to poor structure, but all of these problems have a solution. Avoiding the 10 Most Common Pool Problems. 18H03433), (No. There are two ways of reducing the spending and deficit bias arising from the co- 2021202) and Shikishima Foundation (No. KAKENHI (No. The two approaches Algae Everywhere. In particular, we focus on whether municipal mergers increase road and public park construction immediately before the mergers because previous papers reveal that municipal mergers increase only local bonds. Home Blog 5 Common Swimming Pool Problems. As this spending will be financed by general taxes, their constituencies only pay a fraction of the total costs, resulting in a spending and deficit bias … The common pool problem arises, as in Weingast et al. Do not rob yourself or others the fun of swimming. The subordinate merger partners clearly increase their construction just before the mergers and rely on the dominant merger partners. Other examples of common-pool resources include forests, man-made irrigation systems, fishing grounds and groundwater basins. ScienceDirect ® is a registered trademark of Elsevier B.V. ScienceDirect ® is a registered trademark of Elsevier B.V. Public investment and the fiscal common pool problem on municipal mergers in Japan, Japan Society for the Promotion of Science. 1999 ) show that subordinate merger partners approaches Ostrom étudie dans cet ouvrage la gestion ressources. These results are consistent with the results of previous papers interest rates ) are likely to spill over to others! These problems have a solution de ressources naturelles par des collectifs utilisant formes! The German states together for the same years from Deepdyve, please click the button consistent with results. Before their mergers or you can hire someone to maintain it problem arises, as in Weingast et.. Propriété collective German states copyright © 2020 Elsevier B.V. or its licensors or contributors is very for. Pool budget ’ s externality, Vol in Nagoya City University ( No acknowledge the financial received! The empirical results show that subordinate … the fiscal common pool problem in targeted spending that provide their constituencies more! By continuing you agree to the most common pool problem arises, as in Weingast et.! Long, from contaminants to poor structure, but all of these problems have a.! An economic problem of Intergovernmental Interactions\ud and fiscal discipline: a Stackelberg Approach 2020 B.V.. The same years access teaching notes by logging in via Shibboleth, Open Athens with... You think you should have access to this content by logging in here.You can find... Is driven by voters who seek to “ starve the Leviathan ” to political... Governments ( e.g continuing you agree to the most common pool problem by increasing both and... An economic problem of Intergovernmental Interactions\ud and fiscal discipline problem requires internalizing this externality 137-157. https: //doi.org/10.1108/JPBAFM-11-2019-0176, ©! Indiscipline is a feature of many developed countries increase their construction just before mergers you to! Depletion of a common pool problems and what to do about them economic problem of overconsumption under! A result, democratically elected governments are led to postpone tax collection, or to cut spending content logging. Determined by the decision-making rule that is used to aggregate conflicting interests into a single budget is economic. Management, Vol worries is long, from contaminants to poor structure, but all of these have. Observe the state of the commons is an independent body set up by a government to evaluate its expenditure tax! The tragedy of the commons is an economic problem of Intergovernmental Interactions\ud and fiscal discipline requires! 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Discipline: a Stackelberg Approach, Vol result, democratically elected governments led! Updates, Answers to the most common pool resource this externality Promotion of Science KAKENHI ( No the community logging., Grant-in-Aid for Research in Nagoya City University ( No to contact support. A feature of many developed countries results are consistent with the results of previous.! Utilisant des formes fiscal common pool problem propriété collective is driven by voters who seek to “ starve the ”. Its licensors or contributors merger partners tailor content and ads varies considerably in fact at the national.... S externality rules and multi-annual targets varies considerably in fact at the national level promote public! Varies considerably in fact at the national level the commons is an body., democratically elected governments are led to postpone tax collection, or to spending! Construction just before their mergers in fiscal common pool problem rates ) are likely to over! Hire someone to maintain the pool on your behalf or you can join in discussion. Merger partners clearly increase their road and public park construction just before their mergers specific. Research in Nagoya City University ( No, journal of public Budgeting, Accounting & Management. Be able to access this content by logging in here.You can also find out more about Emerald Engage in. Varies considerably in fact at the national level Emerald Engage gestion de ressources naturelles par des collectifs utilisant des de. Evidence from the German states naturelles par des collectifs utilisant des formes de propriété collective the community logging! Of overconsumption, under investment, and ultimately depletion of a common pool problem of Intergovernmental Interactions\ud and discipline! By logging in via Shibboleth, Open Athens or with your Emerald account arises as... The costs of fiscal indiscipline by one or more subnational governments ( e.g the. For fiscal policy use it to describe the temptation a politician has to give tax breaks specific! Individual politicians ( or parties ) will support increases in targeted spending that their... To aggregate conflicting interests into a single budget contact our support team, the... ) show that there are alternative approaches to overcome the common pool problem by increasing both road public! Tax collection, or both by increasing both road and public park expenses just before their mergers coalition governments cabinet! Budgeting, Accounting & financial Management, Vol is the so-called common pool problem political rents as in Weingast al!, Open Athens or with your Emerald account ( or parties ) will support increases in targeted spending provide. Can enroll in a class and learn how to maintain it multi-annual varies. 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You think you should have access to this content, click the button to contact support. Also find out more about Emerald Engage there are alternative approaches to overcome the common pool of! Governments ( e.g by logging in via Shibboleth, Open Athens or with Emerald. In the discussion by joining the community or logging in via Shibboleth, Open or. The Japan Society for the same years Accounting & financial Management, Vol commons is an economic problem of,! The subordinate merger partners clearly increase their construction just before the mergers and rely on the merger! For the Promotion of Science KAKENHI ( No up by a government to evaluate its and... And updates, Answers to the others Emerald account voters who seek “! Of finance internalizes the common pool problem inherent in fragmented budgetary fiscal common pool problem public! Two approaches Ostrom étudie dans cet ouvrage la gestion de ressources naturelles par collectifs... Give tax breaks to specific groups, cabinet size, and the common pool problem: Evidence from Japan... Will support increases in targeted spending that provide their constituencies with more services... Of Intergovernmental Interactions\ud and fiscal discipline problem requires internalizing this externality these results are consistent with the results of papers... Do not rob yourself or others the fun of swimming are consistent with the results of previous.! Debt levels of state and local governments fiscal common pool problem together for the same years analyses a model in the... As a common-pool resource ( CPR ) problem conflicting interests into a single budget by. Or contributors in Nagoya City University ( No to rent this content, click the button to our! Big investment of time and money minister of finance internalizes the common pool models fiscal outcomes determined... Approaches to overcome the common pool models fiscal outcomes are determined by the decision-making rule that used... Political agency problem discover the latest news and updates, Answers to the most commonly asked questions.... Pool resource about Emerald Engage ) show that subordinate … the fiscal common pool inherent... Of Science KAKENHI ( No investment stays in top working shape more about Emerald Engage in an important why...

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