The multi-level fiscal governance of ecological transition
This paper investigates the role of fiscal federalism in driving ecological transition,
a key challenge in the United Nations’ Sustainable Development Goals agenda. The ecological
transition seeks a sustainable society that prioritises natural resource preservation
and reduces environmental impacts. The study investigates the link between fiscal
federalism institutions and ecological transition policies, focusing on regional and
local governments’ role in implementing environmental goals. Despite subnational governments’
commitment to green objectives, comprehensive plan implementation has been limited
due to local governments’ incentive schemes and capacity constraints.
The paper examines the potential of fiscal federalism institutions, such as fiscal
rules, transfers and capacity-building programs, to support ecological transition
policies. The research emphasises engaging regional and local governments in the green
agenda and highlights the need for tailored approaches in multi-level fiscal governance
to effectively achieve environmental goals. By investigating fiscal federalism’s potential
contribution to ecological transition, the paper offers valuable insights for policymakers
addressing environmental challenges through a multi-level governance approach.
Published on June 26, 2023
In series:OECD Working Papers on Fiscal Federalismview more titles