Intergovernmental Fiscal Cooperation and Subnational Revenue Autonomy

This paper focuses on two distinct but interrelated subjects. First, it discusses how cooperation among and within the different levels of government can help improve macro-fiscal management, as well as various aspects of intergovernmental fiscal relations. These include the delivery of subnational goods and services, the system of intergovernmental transfers, and the control of subnational indebtedness. Second, the paper highlights the benefits of, and obstacles to, subnational revenue autonomy and points to appropriate own-revenue sources for regional and local governments. It also discusses how intergovernmental cooperation can help subnational governments strengthen their revenue administration capacity. The paper was prepared as a result of the 2017 International Forum of the Decentralization and Subnational Fiscal Management Network of Latin America and the Caribbean, led by the Fiscal Management Division of the Inter-American Development Bank. It utilizes a number of country experiences from within and outside the region to illustrate successful approaches to the challenges of intergovernmental cooperation and subnational revenue mobilization.