Compensation for environmental services and intergovernmental fiscal transfers : the case of India

Kumar, Surender & Managi, Shunsuke (2009) Compensation for environmental services and intergovernmental fiscal transfers : the case of India. Ecological Economics, 68(12), pp. 3052-3059.

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Abstract

This paper studies mechanisms to compensate local government for the public provision of environmental services using the theory of optimal fiscal transfers in India. Especially, we analyzed the role of intergovernmental fiscal transfers in achieving the environmental goal. Simply assigning the functions at appropriate levels does not ensure optimal provision of environmental services. Optimality in resource allocation could be achieved by combining the assignment system with an appropriate compensation mechanism. Intergovernmental fiscal transfers would be a suitable mechanism for compensating the local governments and help in internalizing the spillover effects of providing environmental public goods. Illustrations are also provided for India.

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18 citations in Scopus
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14 citations in Web of Science®

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ID Code: 75486
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Environmental expenditure; Environmental services; Fiscal federalism; India; Spatial externalities
DOI: 10.1016/j.ecolecon.2009.07.009
ISSN: 1873-6106
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: © 2009 Elsevier B.V. All rights reserved.
Deposited On: 24 Aug 2014 23:35
Last Modified: 26 Aug 2014 02:32

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