DOAJ Open Access 2023

State capacity & the soft budget constraint: Fiscal federalism, Indian style

Praduymn K. Tripathi Theocharis N. Grigoriadis

Abstrak

In this paper, we explore the effects of India's federal structure on state-level fiscal responsibility. Drawing from a 1991–2018 dataset, we argue that higher levels of transfer and borrowing dependence (soft budget constraints) from the central government facilitate lower levels of fiscal responsibility by subnational governments. Our hypothesis is tested using panel regressions on fiscal responsibility outcomes across Indian states. We also evaluate the effects of the world's largest employment program, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), on subnational fiscal responsibility. We find that rural public employment measures are conducive to lower levels of fiscal responsibility. Soft budget constraints constitute a key structural feature of Indian federalism.

Topik & Kata Kunci

Regional economics. Space in economics

Penulis (2)

Praduymn K. Tripathi

Theocharis N. Grigoriadis

Format Sitasi

APA MLA BibTeX

Tripathi, P.K., Grigoriadis, T.N. (2023). State capacity & the soft budget constraint: Fiscal federalism, Indian style. https://doi.org/10.1016/j.aglobe.2023.100058

Akses Cepat

PDF tidak tersedia langsung

Cek di sumber asli →

Lihat di Sumber doi.org/10.1016/j.aglobe.2023.100058

Informasi Jurnal