National Fiscal Policy and Local Government during the Economic Crisis, Vol. 1

This report examines how national government policy, and particularly national grant systems, affected local governments during the 'Great Recession' and its aftermath, which in many countries consisted of a period of fiscal consolidation designed to cope with a debt/deficit crisis. The author terms these two events, occurring over a four-year period from late 2007 through 2011, 'the economic crisis'. Of particular concern are national government policy toward local governments and whether local government fiscal responses were counter- or pro-cyclical during the period of slow or negative economic growth. In other words, did national government policy promote additional local government spending during the recession (a counter-cyclical policy), or did it encourage reduced sub-national government spending (a pro-cyclical policy)? The paper also examines whether local government fiscal policy was consistent with stated national government policy, and whether and how the imposition of fiscal austerity policy and fiscal consolidation programs at the national level affected local government spending.

ESO: Background information: National Fiscal Policy and Local Government during the Economic Crisis, Vol. 2: Country Profiles http://www.europeansources.info/record/national-fiscal-policy-and-local-government-during-the-economic-crisis-vol-2-country-profiles/

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