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Centre de politique et d'administration fiscales

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Navigating conflict and fostering co-operation in fiscal federalism

This paper examines intergovernmental fiscal disputes and co-operation mechanisms across federal and decentralised countries. Employing a case study approach and AI tools, the research analyses constitutional court rulings and their influence on the development of fiscal federalism in seven countries: Australia, Belgium, Brazil, Canada, Germany, India and the United States, with additional insights from Spain, the Netherlands and the European Union. The findings reveal significant variations in the nature and frequency of disputes and judicial interventions, highlighting the crucial role of court decisions in shaping fiscal federalism, most notably in the area of taxation. While conflicts are inherent to decentralised systems, their nature and frequency vary based on each country’s unique constitutional, political, and economic context. The paper recommends strategies for managing disputes and fostering co-operation, including clearly defining powers and responsibilities, enhancing the role of courts in providing fiscal guidance, strengthening intergovernmental institutions and ensuring adaptability to changing conditions. The study concludes that a proactive, collaborative approach involving all tiers of government is crucial to navigate the complexities of fiscal federalism and promote effective governance.

Title under embargo until July 22, 2024 05:00 GMT+00:00

In series:OECD Working Papers on Fiscal Federalismview more titles