Template-type: ReDIF-Paper 1.0

Author-Name: Timothy J. Goodspeed
Author-Workplace-Name: Hunter College and The Graduate Center, CUNY
Author-Workplace-Email: tgoodspe@hunter.cuny.edu 


Title: The Evolving Role of Subnational Borrowing in Financing Decentralized Government 

Abstract: Should subnational borrowing have a role in financing fiscal decentralization? Subnational debt received relatively little attention in the classic discussion of federalism by Oates (1972) although he indicates some ways in which subnational borrowing is sensible. I discuss what role (if any) subnational borrowing can play in macroeconomic stabilization as well state and local borrowing for capital projects. I also summarize recent discussions that center on the problems associated with subnational borrowing and potential solutions. What institutions, rules of the game, or rules of behavior are needed for successful subnational borrowing? Are there alternatives to subnational borrowing that can work better? I end by discussing the changing capital needs of subnational governments.

Length: 21 pages

Creation-Date: 2024-12

File-URL: https://icepp.gsu.edu/files/2025/01/paper2414.pdf
File-Format: application/pdf

Handle: RePEc:ays:ispwps:paper2414