Hamilton's Paradox: The Promise and Peril of Fiscal Federalism (Cambridge Studies in Comparative Politics)

by Jonathan Rodden (Author)

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ISBN-13: 978-0521603669

ISBN-10: 0521603668

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As new federations take shape and old ones are revived around the world, a difficult challenge is to create incentives for fiscal discipline. A key question is whether a politically-motivated central government can credibly commit not to bail out subnational governments in times of crisis if it funds most of their expenditures. By combining theory, quantitative analysis, and historical and contemporary case studies, this book provides a new perspective on why different countries have had dramatically different experiences with subnational fiscal discipline.

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"This timely book takes on a crucial topic for scholars and practitioners-especially in newly democratizing societies that are walking the potentially dangerous and complex road towards decentralization. It departs from what was becoming conventional wisdom, and develops a more critical and agnostic approach to federalism and decentralization than its predecessors. Roddenas arguments emerge from comparative politics, game theory, and modern macroeconomics, and his empirical approach combines subtlety and breadth by mixing quantitative and qualitative analyses, ranging from cross-country regressions to rich treatments of complex historical cases.(continued underneath)

Especially appealing is the fact that his country specialization is thematic and comparative rather than regional. Hamilton's Paradox will become a must-read for economists, political scientists, and other analysis interested in federalism, fiscal policy, and institutional development more generally, and it sets the agenda for future research in the field." Mariano Tommasi, Universidad de San Andrés

"This is a landmark book on fiscal federalism and one that will be influential both in policy circles and in the academy for many years to come." Mark Hallerberg, Emory University

Book Description

As new federations take shape and old ones are revived around the world, a difficult challenge is to create incentives for fiscal discipline. By combining theory, quantitative analysis, and historical and contemporary case studies, this book lays out the first systematic explanation of why decentralized countries have had dramatically different fiscal experiences. It provides insights into current policy debates from Latin America to the European Union, and a new perspective on a tension between the promise and peril of federalism that has characterized the literature since The Federalist Papers.

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Product details

Series: Cambridge Studies in Comparative Politics
Paperback: 336 pages
Publisher: Cambridge University Press (December 26, 2005)
Language: English
ISBN-10: 0521603668
ISBN-13: 978-0521603669
Product Dimensions: 6 x 0.8 x 9 inches
Shipping Weight: 1.3 pounds (View shipping rates and policies)
Average Customer Review: 1 customer review
Amazon Best Sellers Rank: #1,308,155 in Books (See Top 100 in Books)
- #1169 in Non-US Legal Systems (Books)
- #641 in Public Affairs
- #445 in Public Finance (Books)

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new approach to an old problem

September 13, 2012

Format: Paperback

As the book's title suggests, the problem of how to restrain local governments from excessive spending when they are backed up by a federal guarantee has haunted federalism since Hamilton's time. Rodden's book takes a nuanced approach to this question with careful hypotheses that interact federal autonomy with national and local fiscal discipline. He then tests the hypotheses with data from OECD countries. Highly recommended for student of political economy and/or federalism.

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