The Center for Basque Studies (CBS) in collaboration with the Government of Bizkaia have organized the International Conference-Webinar «Decentralized government response to the COVID-19 crisis» that will be held at the University of Nevada (Reno, United States) on November 16-17.
COVID-19 pandemic brought attention to coordination problems between central and local governments in countries with decentralized government systems. While there are also some success stories regarding government response to the pandemic, many decentralized countries suffered from the coordination problems particularly in terms of public health response. In this conference, researchers from the University of Nevada, Reno College of Business, the Center for Basque Studies, the Government of Bizkaia in the Basque Country and the University of the Basque Country, Faculty of Economics and Business will present evidence on decentralized government response from different country and local case studies. The goal of the conference is to compare the experience and performance of different governments to understand which policies have worked better during the pandemic. The papers from the conference will be published by the CBS.
Register for the webinar by clicking on the link: REGISTRATION
Download the conference poster
Conference program (Central European Time: Basque Country / Pacific Time: Reno)
Abstracts
Central and Local Government Response to Covid-19: International Evidence / Mehmet Tosun
The government response to the COVID-19 pandemic is one of the most discussed topics since the pandemic started. While some governments responded quickly and swiftly to the pandemic, others have largely failed. For example, in an article published in the New England Journal of Medicine, Rebecca L. Haffajee and Michelle M. Mello note “strong, decisive national action is therefore imperative,” and add “…the lack of interjurisdictional coordination has and will cost lives.” In this presentation, I will be showing differences in government response in different countries using data from the Oxford Coronavirus Government Response Tracker (OxCGRT) and other sources including the OECD and IMF databases. I will also provide examples of central-local government coordination from different country cases.
Covid-19 Impact on Export Support Programs – A Case of Nevada / Pawel Pietrasienski
The lockdown measures during Covid-19 as a response to the spread of the new coronavirus threaten the existence of high-growth innovative startups and SMEs. That is why policy measures should not only provide short-term financial support to struggling companies, but also involve long-term approaches to boost a growth and attractiveness of the whole entrepreneurial ecosystem. One of the ways is to boost SMEs export activities and implement dedicated support programs by regional governments. In a post Covid-19 era governments will face enormous financial deficits resulting to be extremely constrained in the selection of the best investments to restart their economies. Therefore, existing entrepreneurial support programs with a strong track record, like Nevada’s State Trade Expansion Program, should be in a favorable position to be successfully funded.
As a strong economy is essential for recovery, increasing export capabilities by Nevada’s small businesses is essential to sustain and increase a state economy’s competitiveness. As exporting companies pay almost 20% more to their employees than non-exporting ones, increasing the number of new-to-export entities will improve the quality of life for Nevada’s workers and their families. In order to stay competitive, Nevada needs to boost its presence abroad through cooperation with global partners who play a major role in foreign direct investment, lead generation, and export support. The latter – because of the COVID-19 – should use more digital instruments and platforms than ever before.
The Limits of Decentralization: the Swiss Example / Sonja Pippin
Similar to the United States, Switzerland’s government system is highly decentralized. Furthermore, in Switzerland the people participate directly in policy decisions at every level (municipal, canton, as well as national). Decentralization of government responsibilities is often touted as means to ensure a more efficient and better accepted government. Yet, decentralization has its limits which has historically been shown in the 1840s when certain unifying standards (e.g., currency & customs) improved trading and boosted the Swiss economy. These limitations can also apply in situations of a crisis such as the Covid-19 pandemic and its consequences. This paper illustrates how the Swiss national government was torn between needing unified national responses to combat the virus and aid the economy and the people’s desire to address as many issues as possible at the local level. The outcome was a less than optimal strategy which resulted in the national referendum, a national vote on the Covid-19 law (scheduled for June 13, 2021).
The European fiscal pillar on the edge of the pandemic / Andoni Montes
The Covid-19 crisis has caused unmeasurable damage on our society and economy. But perhaps, it has also brought the opportunity to deepen into the construction of an actual European Fiscal Union, as many called for to complete an ill-functioning European Monetary Union (EMU). Before the pandemic emerged, the debate on the European arena was focused on how large the budgetary cut on the 2021-27 Multiannual Financial Framework (MFF) would be due to Brexit. Just a few months later, the budgetary stability and financial sustainability framework was suspended, and member states have reached a compromise to create a recovery fund (NextGenEU). This fiscal response to the pandemic was to be funded by new own fiscal resources and by an unprecedented issuance of common EU debt. This chapter will first look back to the pre-COVID-19 European fiscal discussion, to continue addressing the fiscal response to the pandemic, both from revenue and expenditure point of views. Finally, considerations on the future of the European Fiscal Union will be developed, from the analytical framework of fiscal federalism.
International exchange of tax information and the Basque Economic Agreement / Raquel Tubía
In the current situation, with an ongoing Pandemic that will have not yet quantified economic consequences, and when we were still recovering from the last big crisis of 2008, one of the main risks for the worldwide governments is the fall of the public incomes due to tax avoidance and fraud. A long way has been done since the OECD Global Convention started its life in 1998 to implement effective measures to help countries to fight the fall of the tax collection. Several tools have been, and are being, developed to stablish an international exchange of financial information for transparency between jurisdictions, including FATCA law from the USA. Countries have all understood that only through cooperation, tax evasion will be tackled.
In this context, the involvement of all the countries and jurisdictions is undoubtedly the key of the success of those tools that will allow us to reduce fraud, tax avoidance and public incomes erosion. And we cannot forget that the tax policies are managed, in a lot of countries, in a decentralized way. This is the case of the Basque Country, whose special autonomous tax system based on the legal status of the ‘Economic Agreement’, turns this Administration into a necessary participant of those cooperation tools, not just as a giver and receiver of information, but also as an advisor in the decision making groups. Let’s not forget that those autonomous jurisdictions have not only the responsibility of legislate their taxes, but also the accountability for the results.
Subnational governments debt management in times of crisis: between bailout and fiscal responsibility. The case of the Basque Country /
Mikel Erkoreka and Robert Ugalde
The Covid-19 pandemic has placed great pressure on public finances around the world, causing a sharp increase in global public debt. The recovery of long-term fiscal sustainability and public debt management will be one of the hot topics to be managed in the post-pandemic scenario. In the systems of fiscal federalism and/or decentralisation, the management of public finances also reaches subnational governments. The Basque Country has overcome the initial impact of the COVID-19 crisis by keeping its credit rating -according to Moody’s and S&P-, above that of the sovereign state itself (Spain). This paper examines the Basque Country’s case study to analyse the importance of tax autonomy and the principles of fiscal responsibility and unilateral risk in ensuring a sustainable and creditworthy management of subnational governments debt within the framework of fiscal federalism systems.