Rethinking federalism: Changing power relations between the center and the states

Publius: The Journal of Federalism

Volumn 33, Issue 4, 2003, Pages 21-42

  Bagchi, Amaresh ^a  

^a NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY   (India)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 5644241193     PISSN: 00485950     EISSN: None     Source Type: Journal    
DOI: 10.1093/oxfordjournals.pubjof.a005011     Document Type: Review

References (52)

1. For a succinct summary of the current accusations against decentralization, see Ehtisham Ahmad and Vito Tanzi, eds., "Introduction, " Managing Fiscal Decentralization (London: Routledge, 2002). For a masterly survey of the literature, see Wallace E. Oates, "An Essay on Fiscal Federalism," Journal of Economic Literature 37 (September 1999): 283.
2. For a succinct summary of the current accusations against decentralization, see Ehtisham Ahmad and Vito Tanzi, eds., "Introduction, " Managing Fiscal Decentralization (London: Routledge, 2002). For a masterly survey of the literature, see Wallace E. Oates, "An Essay on Fiscal Federalism," Journal of Economic Literature 37 (September 1999): 283.
3. Ahmad and Tanzi, Managing Fiscal Decentralization, p. 1.
4. Harvey Lazar, "In Search of a New Mission Statement for Canadian Fiscal Federalism," Towards a New Mission Statement, ed., Harvey Lazar (Montreal: McGill-Queen's University Press, 2000).
5. D. J. Collins, ed., Vertical Fiscal Imbalance and the Allocation of Taxing Powers (Canberra: Australian Tax Research Foundation, 1993).
6. The "States Fiscal Reform Facility Fund" has been created at the Center to this end.
7. Although formally the president rules the state under Article 356, in practice it is the Government of India and its appointed governor who govern in the name of the president.
8. Raja J. Chelliah, "Towards a Decentralized Polity," L.K. Jha Memorial Lecture (New Delhi: Fiscal Research Foundation, 1991).
9. Quoted in H.M. Seervai, The Constitutional Law of India (Delhi: Universal Book Depot, 1997), p. 21.
10. For cogent arguments in support of this view, see Seervai, ibid., p. 8.
11. Ian Copland and John Rickard, eds., Federalism: Comparative Perspectives from India and Australia (New Delhi: Manohar, 1999), p. 13.
12. Ronald L. Watts, Comparing Federal Systems (Kingston, ON: Institute of Intergovernmental Relations, Queen's University, 1999).
13. No more than 10-11 percent, it was found by Oates, "An Essay on Fiscal Federalism," 1 in a sample of countries.
14. Report of the National Commission to Review the Working of the Constitution, Vol 1 (New Delhi: Universal Law Publishing Co., 2002), para. 8.1.5.
15. Government of India, Report of the Committee on Centre-State Relations (New Delhi: 1988).
16. This is accompanied also with competitive federalism; see Lawrence Saez, Federalism without a Center (New Delhi: Sage, 2002).
17. M. Govinda Rao and Nirvikar Singh, "Fiscal Transfers in a Developing Country: The Case of India" (paper presented at a seminar at Birmingham, UK, 2002).
18. See Tenth Five Year Plan 2002-2007, Vol. III (Government of India, Planning Commission, 2002), para. 5.41.
19. Richard S. Eckaus, quoted in Amaresh Bagchi and Pulin B. Nayak, "A Survey of Public Finance and Planning Process," Tax Policy and Planning, eds., Amaresh Bagchi and Nicholas Stern (Delhi: Oxford University Press, 1994), p. 21.
20. For a succinct definition of "economic federalism" and its properties, see Robert P. Inman and Daniel L. Rubinfeld, "Rethinking Federalism," Journal of Economic Perspectives 11 (Fall 1997): 45-48.
21. For a discussion of how the mandate of Article 301 was whittled down by invoking "public interest," see Amaresh Bagchi, "Enforcing the Constitution's Common Market Mandate," Economic and Political Weekly 15 June 2002, p. 2303-2308.
22. Mukesh Anand, Amaresh Bagchi, and Tapas K. Sen, "Fiscal Discipline at the State Level: Perverse Incentives and Paths to Reform" (paper presented at the World Bank-NIPFP Seminar, New Delhi, May 2001).
23. For a critique of the transfer system as it evolved over the years, see M. Govinda Rao and Raja J. Chelliah, Fiscal Federalism in India (New Delhi: Indian Council of Social Science Research, 1996).
24. William McCarten, "The Challenge of Fiscal Discipline in Indian States," Fiscal Decentralization and the Challenge of Hard Budget Constraint, eds., Jonathan Rodden, Gunnar Eskeland, and Jennie Litvack (Cambridge, MA: MIT Press, 2003), pp. 249-286.
25. "The powers which the central government has assumed in regard to mobilization, allocation, and pattern of utilization of resources in the plan have reduced the states to the status of supplicants for and from the Center," said the late C.N. Annadurai, then Chief Minister of Tamil Nadu, in the state Assembly in 1967. Madras Legislative Assembly Debate 1967, p. 138.
26. Inman and Rubinfeld, "Rethinking Federalism," 19.
27. This is how Inman and Rubinfeld define "cooperative federalism," ibid., p. 19.
28. Montek Singh Ahluwalia, "Economic Performance in States in Post-Reform Period," Economic & Political Weekly 6 May 2000, pp. 1637-1648.
29. Saez, Federalism without a Center, p. 15.
30. Reserve Bank of India, State Finances: A Study of State Budgets 2002-03, Table 8.
31. D.K. Srivastava, "Analysing State Finances in India" (keynote address at the Annual Conference of the Indian Economic Association, December 2002).
32. M. Govinda Rao, "Invisible Transfers in India's Federalism," Public Finance 52 (3-4 1997): 429-448.
33. M. Govinda Rao and Nirvikar Singh, "The Political Economy of Center-State Fiscal Transfers in India," Institutional Elements of Tax Design and Reform, ed., John McLaren (Washington, DC: The World Bank, 2003), pp. 69-101.
34. Ibid., 30.
35. The contemplated change has been put off for the time being, however, apparently for political reasons.
36. Rodden, Eskeland, and Litvack, eds., Fiscal Decentralization, p. 17.
37. China's spectacular growth in the last two decades is cited as a case in point. See Yingyi Quin and Bary Weingast, "Federalism as a Commitment to Preserving Market Incentives," Journal of Economic Perspectives 1997.
38. Richard A. Musgrave and James M. Buchanan, Public Finance and Public Choice (Cambridge, MA: MIT Press, 1999), p. 163.
39. See Oates, "An Essay on Fiscal Federalism," 1.
40. Ibid., 38.
41. Timothy Conlan, From New Federalism to Devolution (Washington, DC: Brookings Institution, 1998).
42. Albert Breton, "An Introduction to Decentralization Failure," Managing Fiscal Decentralization, eds. Ehtishain Ahmad and Vito Tanzi (London: Routledge, 2002), p. 1.
43. John Kincaid, "The Competitive Challenge to Cooperative Federalism" Competition Among States and Local Governments, eds., Daphine A. Kenyon and John Kincaid (Washington, DC: The Urban Institute Press, 1991), pp. 87-114.
44. Ibid., 19.
45. Ibid., 88.
46. Report of the National Commission to Review the Working of the Constitution, ibid., 13, para 8,8,1.
47. Charles E. McLure, Jr., "Tax Assignment, and Subnational Fiscal Autonomy," International Bureau of Fiscal Documentation Bulletin (December 2000): 626-635.
48. For a cogent discussion of the consequences of this dichotomy, see B.P.R. Vithal and M.L. Sastry, Fiscal Federalism in India (New Delhi: Oxford University Press, 2001).
49. For a critique of conditional grants, see Jeffrey Petchy, P. Shapiro and Cliff Walsh, "Transfers in Federal Systems: A Critical Survey," Intergovernmental Fiscal Relations, ed., Ronald G. Fisher (Boston: Kluwer Academic Publishers, 1997), p. 106.
50. Richard M. Bird and Michael Smart, "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development 30, (June 2002): 899-912
51. PREM Notes, The World Bank, March 2002.
52. Musgrave and Buchanan, Public Finance and Public Choice, p. 38.