In search of a theoretical approach to case studies of subnational governments

Abstract

This essay presents, starting from the traditional concept of fiscal decentralization, the most modern approaches of Fiscal Federalism according to mainstream theory, highlighting the perspectives that derive from Public Choice and New Institutional Economics. Concerning the New Institutional Economics’s federalism view it presents the Principal versus Agent model from the perspective of Hard Budget Constraint. It also discusses the variant of this model for analysis of emerging countries. Finally, it treats some preliminary critical aspects from neo-institutionalism comprehensive overview of Federalism analysis, suggesting the basic elements for a research agenda of subnational governments in Brazil.