Decentralizing Borrowing Powers
The note highlights the importance of sound intergovernmental fiscal relations, and proper regulation for successful sub-national borrowing, and illustrates the potential macroeconomic hazards of decentralizing borrowing powers, arguing that the im...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/1999/01/692850/decentralizing-borrowing-powers http://hdl.handle.net/10986/11501 |
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okr-10986-115012021-06-14T11:02:59Z Decentralizing Borrowing Powers Ahmad, Junaid ACCOUNTABILITY ACCOUNTING BALANCED BUDGET REQUIREMENTS BANK LENDING BANKING SYSTEM BANKRUPTCY BANKRUPTCY LAWS BANKRUPTCY PROCEDURES BORROWING CAPITAL MARKETS CENTRAL GOVERNMENT CREDIT RISK DEBT DEFICITS DEVOLUTION DISCLOSURE ECONOMIC STABILITY ECONOMICS FINANCIAL CONTROL FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL LEGISLATION FISCAL YEAR FOREIGN BORROWING FOREIGN MARKETS INSURANCE INTEREST RATES INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL SYSTEM LEGISLATION LOCAL AUTHORITIES MARKET DISCIPLINE MATURITIES MORAL HAZARD MUNICIPALITIES PENALTIES POLITICAL DECENTRALIZATION PRESIDENCY PRICE STABILITY PRIVATE BANKING PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PROVINCIAL GOVERNMENTS PUBLIC FINANCE PUBLIC FINANCING PUBLIC INFORMATION PUBLIC INFRASTRUCTURE PUBLIC OWNERSHIP PUBLIC SECTOR PUBLIC SYSTEM RATING AGENCIES REGULATORY FRAMEWORK SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENTS TAX TAXATION TERM FINANCE TRANSPARENCY BORROWING POLICY DECENTRALIZATION SUBNATIONAL FINANCES MACROECONOMICS FINANCIAL DEVELOPMENT FISCAL EFFICIENCY MACROECONOMIC STABILITY REGULATORY FRAMEWORK CAPITAL BUDGETS POLITICAL ACCOUNTABILITY INFORMATION SYSTEMS LEGISLATIVE FRAMEWORK TAXATION BUDGET MANAGEMENT CAPITAL MARKETS The note highlights the importance of sound intergovernmental fiscal relations, and proper regulation for successful sub-national borrowing, and illustrates the potential macroeconomic hazards of decentralizing borrowing powers, arguing that the impact of a possible moral hazard problem, namely, the access to financial markets by sub-national governments, may generate unplanned liabilities for central governments. Yet academia, and country experiences do not suggest adverse links between decentralized borrowing powers, and the central government's ability to maintain fiscal discipline, and macroeconomic stability. Rather the key seems to lie in the design of fiscal decentralization, particularly the regulatory framework under which borrowing powers are decentralized. The note outlines the reasons why sub-national governments require access to financial markets: to finance capital spending, and foster political accountability, which can be achieved through direct borrowing by central government, through a public financial intermediary, or, through direct borrowing. As per designing the regulatory framework, the note suggests better information systems, bankruptcy laws, and access to tax bases, in addition to separate fiscal/financial systems, and sound legislation to impose budget discipline, enabling access to capital markets to complement fiscal powers devolution to regional authorities. 2012-08-13T15:14:26Z 2012-08-13T15:14:26Z 1999-01 http://documents.worldbank.org/curated/en/1999/01/692850/decentralizing-borrowing-powers http://hdl.handle.net/10986/11501 English PREM Notes; No. 15 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Brief Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTABILITY ACCOUNTING BALANCED BUDGET REQUIREMENTS BANK LENDING BANKING SYSTEM BANKRUPTCY BANKRUPTCY LAWS BANKRUPTCY PROCEDURES BORROWING CAPITAL MARKETS CENTRAL GOVERNMENT CREDIT RISK DEBT DEFICITS DEVOLUTION DISCLOSURE ECONOMIC STABILITY ECONOMICS FINANCIAL CONTROL FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL LEGISLATION FISCAL YEAR FOREIGN BORROWING FOREIGN MARKETS INSURANCE INTEREST RATES INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL SYSTEM LEGISLATION LOCAL AUTHORITIES MARKET DISCIPLINE MATURITIES MORAL HAZARD MUNICIPALITIES PENALTIES POLITICAL DECENTRALIZATION PRESIDENCY PRICE STABILITY PRIVATE BANKING PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PROVINCIAL GOVERNMENTS PUBLIC FINANCE PUBLIC FINANCING PUBLIC INFORMATION PUBLIC INFRASTRUCTURE PUBLIC OWNERSHIP PUBLIC SECTOR PUBLIC SYSTEM RATING AGENCIES REGULATORY FRAMEWORK SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENTS TAX TAXATION TERM FINANCE TRANSPARENCY BORROWING POLICY DECENTRALIZATION SUBNATIONAL FINANCES MACROECONOMICS FINANCIAL DEVELOPMENT FISCAL EFFICIENCY MACROECONOMIC STABILITY REGULATORY FRAMEWORK CAPITAL BUDGETS POLITICAL ACCOUNTABILITY INFORMATION SYSTEMS LEGISLATIVE FRAMEWORK TAXATION BUDGET MANAGEMENT CAPITAL MARKETS |
| spellingShingle |
ACCOUNTABILITY ACCOUNTING BALANCED BUDGET REQUIREMENTS BANK LENDING BANKING SYSTEM BANKRUPTCY BANKRUPTCY LAWS BANKRUPTCY PROCEDURES BORROWING CAPITAL MARKETS CENTRAL GOVERNMENT CREDIT RISK DEBT DEFICITS DEVOLUTION DISCLOSURE ECONOMIC STABILITY ECONOMICS FINANCIAL CONTROL FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL SECTORS FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL FISCAL DECENTRALIZATION FISCAL DISCIPLINE FISCAL LEGISLATION FISCAL YEAR FOREIGN BORROWING FOREIGN MARKETS INSURANCE INTEREST RATES INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL SYSTEM LEGISLATION LOCAL AUTHORITIES MARKET DISCIPLINE MATURITIES MORAL HAZARD MUNICIPALITIES PENALTIES POLITICAL DECENTRALIZATION PRESIDENCY PRICE STABILITY PRIVATE BANKING PRIVATE BANKS PRIVATE SECTOR PRIVATIZATION PROVINCIAL GOVERNMENTS PUBLIC FINANCE PUBLIC FINANCING PUBLIC INFORMATION PUBLIC INFRASTRUCTURE PUBLIC OWNERSHIP PUBLIC SECTOR PUBLIC SYSTEM RATING AGENCIES REGULATORY FRAMEWORK SUBNATIONAL GOVERNMENT SUBNATIONAL GOVERNMENTS TAX TAXATION TERM FINANCE TRANSPARENCY BORROWING POLICY DECENTRALIZATION SUBNATIONAL FINANCES MACROECONOMICS FINANCIAL DEVELOPMENT FISCAL EFFICIENCY MACROECONOMIC STABILITY REGULATORY FRAMEWORK CAPITAL BUDGETS POLITICAL ACCOUNTABILITY INFORMATION SYSTEMS LEGISLATIVE FRAMEWORK TAXATION BUDGET MANAGEMENT CAPITAL MARKETS Ahmad, Junaid Decentralizing Borrowing Powers |
| relation |
PREM Notes; No. 15 |
| description |
The note highlights the importance of
sound intergovernmental fiscal relations, and proper
regulation for successful sub-national borrowing, and
illustrates the potential macroeconomic hazards of
decentralizing borrowing powers, arguing that the impact of
a possible moral hazard problem, namely, the access to
financial markets by sub-national governments, may generate
unplanned liabilities for central governments. Yet academia,
and country experiences do not suggest adverse links between
decentralized borrowing powers, and the central
government's ability to maintain fiscal discipline, and
macroeconomic stability. Rather the key seems to lie in the
design of fiscal decentralization, particularly the
regulatory framework under which borrowing powers are
decentralized. The note outlines the reasons why
sub-national governments require access to financial
markets: to finance capital spending, and foster political
accountability, which can be achieved through direct
borrowing by central government, through a public financial
intermediary, or, through direct borrowing. As per designing
the regulatory framework, the note suggests better
information systems, bankruptcy laws, and access to tax
bases, in addition to separate fiscal/financial systems, and
sound legislation to impose budget discipline, enabling
access to capital markets to complement fiscal powers
devolution to regional authorities. |
| format |
Publications & Research :: Brief |
| author |
Ahmad, Junaid |
| author_facet |
Ahmad, Junaid |
| author_sort |
Ahmad, Junaid |
| title |
Decentralizing Borrowing Powers |
| title_short |
Decentralizing Borrowing Powers |
| title_full |
Decentralizing Borrowing Powers |
| title_fullStr |
Decentralizing Borrowing Powers |
| title_full_unstemmed |
Decentralizing Borrowing Powers |
| title_sort |
decentralizing borrowing powers |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/1999/01/692850/decentralizing-borrowing-powers http://hdl.handle.net/10986/11501 |
| _version_ |
1764416963068559360 |