Fiscal Federalism and Grants-In-Aid: The Problem of Asymmetrical Information

by Rosella Levaggi

The history of intergovernmental grants in Britain has been characterized by dramatic changes in the grant distribution formula that some commentators have interpreted as a failure of the system to reach its objectives. In this work, the author presents a different interpretation by explaining how the different grant distribution formulae applied in the last decades characterizes the relationship between Central and local government. The book presents a unique approach to fiscal federalism and grant-in-aid since it takes explicit account of the asymmetry of the information problems that Central Government has to face. The history of grant-in-aid and the introduction of the community charge is then interpreted in the light of this problem.

208 pages, Hardcover

First published January 1, 1991