Normative principles provide a relatively clear set of rules for the balance between grants and taxes (box 1 reviews the normative theory), but in practice a variety of types of tax-grant systems are observed in OECD countries, which do not all follow these rules. According to the theory,...

The ability of sub national governments to “better spend”, by identifying relevant paths for territorial competitiveness and effective delivery of public services, is largely enshrined in their institutional background. Rather than isolated actors, sub national authorities and central...