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Flaws and myths in the case for Scottish fiscal autonomy

Ashcroft, B.K. and Christie, C.A. and Swales, J.K. (2006) Flaws and myths in the case for Scottish fiscal autonomy. Quarterly Economic Commentary, 31 (1). pp. 33-39. ISSN 0306-7866

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Abstract

Paper argues that some of the claimed advantages of fiscal federalism "may not be as robust as asserted by its proponents". The incentive of retained tax revenues would be no greater under fiscal autonomy than under forms of fiscal federalism or decentralisation. It is an assumption that the return of higher tax revenues would provide an incentive to Scottish politicians to promote growth. "There is a lack of empirical evidence that the pursuit of higher revenues and expenditure is a paramount concern for sub central governments." The case for fiscal autonomy implies that local politicians are forward-looking and have low time discount rates, "not a characteristic normally associated with the practice of politics".