The Political Economy of Financing Scottish Government: Considering a New Constitutional Settlement for Scotland

by C. Paul Hallwood, Ronald MacDonald

Overview

Fiscal autonomy could raise economic growth and efficiency in Scotland, benefiting both Scotland and the rest of the United Kingdom. C. Paul Hallwood and Ronald MacDonald discuss how other reform proposals, which amount to cutting Scotland's block grant, would not be seen as legitimate by Scottish voters, and would be unlikely to reduce the burden on the Westminster budget.

The authors demonstrate how public finances can be organized to minimize the price of tranquillity in multi-regional states. Advances proposed in the 'new fiscal federalism' literature are used to explain why fiscal autonomy would be a superior system compared to the present block grant system and fiscal federalism, whereby Scotland would be granted limited tax powers. Their extensive review of recent econometric studies finds that tax devolution in other countries has been largely successful.

Product Details

ISBN-13:	9781848440425
Publisher:	Edward Elgar Publishing
Publication date:	08/30/2009
Series:	Studies in Fiscal Federalism and State-local Finance series
Pages:	160
Product dimensions:	6.10(w) x 9.30(h) x 0.70(d)

About the Author

C. Paul Hallwood, University of Connecticut, US and Ronald MacDonald, Adam Smith Professor of Political Economy, University of Glasgow, UK

Table of Contents

Contents: Foreword by Drew Scott Preface 1. Introduction 2. Searching for a Politically and Economically Rational Public Funding Model for Scotland 3. The Economic Case for Fiscal Devolution 4. Objectives of an Effective Fiscal Federal System 5. Fiscal Federalism: A Scottish Perspective 6. The Case for Scottish Fiscal Autonomy 7. A Restatement of the Case for Scottish Fiscal Autonomy 8. Fiscal Devolution in Some Other Countries 9. Empirical Evidence: Tax Devolution and Prosperity 10. A Separate Currency for Scotland? 11. Conclusion Bibliography Index

Editorial Reviews

'The Barnett formula is doomed. These authors provide a readable and convincing guide to the alternatives. The volume is a wonderful example of what tight economic reasoning can do - its case for fiscal autonomy is unanswerable'.

Professor Michael Artis

'Hallwood and MacDonald make a compelling case for the devolution of fiscal authority to Scotland to increase fiscal autonomy and improve fiscal performance. They suggest not only the need for such devolution but provide a careful analysis and blueprint of how to do it.'

Wallace E. Oates

'Written by two economists independent of the sort of political biases that mar so much of the discussion this book offers a refreshing, analytical and authoritative economic analysis of the various paths for fiscal reform in Scotland.’

Professor Drew Scott

'The Barnett formula is doomed. These authors provide a readable and convincing guide to the alternatives. The volume is a wonderful example of what tight economic reasoning can do - its case for fiscal autonomy is unanswerable'.

From the Publisher