ministry of finance sweden specific and general grants in sweden what has occurred after the grant...
TRANSCRIPT
Ministry of Finance Sweden
Specific and general grants in Sweden
what has occurred after the grant reform in the 1990’s?
Ministry of Finance Sweden
Questions for my paper
• Has a shift has taken place with respect to the use of general and specific purpose grants allocated to local governments in Sweden?
• Specifically:• Have the specific purpose grants increased? • How has the balance (policy-mix) between
general and specific purpose grants evolved over time?
Ministry of Finance Sweden
Grant reform of 1990’s
• Emphasis on general grants • Though specific grants still in place
• 1993 municipalities • 1996 county councils
Ministry of Finance Sweden
Specific grants before 1993
• Equalise service levels and• Secure an element of basic security
and fairness to citizens, irrespective of their place of living.
• Specific grants expanded the scope and the size of the public sector = intented impact.
Ministry of Finance Sweden
Arguments for a general grant system
• Economic efficiency.• Better equalisation of costs and income.• Enhance local democracy, accountability,
flexibility and innovation. • 18 specific grants were abolished and
used to finance the general grants.
• Financial crisis played into the decision.
Ministry of Finance Sweden
Grants in the early 1990’s
0
10
20
30
40
50
60
70
80
90
100
1990 1991 1992 1993
General grants (VAT compensation excluded)
Specific purpose grants
Sum of general & conditional grants
Ministry of Finance Sweden
Criteria for specific grants that should remain
• Payments for services undertaken on behalf of the state,
• for investment and development, • existed due to labour market
considerations, • for public housing, • were paid on equal terms to local
governments and other organisations and
• for renewal and development projects.
Ministry of Finance Sweden
Specific purpose grants 1990-1993
0
10
20
30
40
50
60
70
80
1990 1991 1992 1993
Municipalities
County councils
Ministry of Finance Sweden
Specific grants have increased
0
20
40
60
80
100
120
140
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Ministry of Finance Sweden
Specific and general grants 2003-2008
0
20
40
60
80
100
120
140
2003 2004 2005 2006 2007 2008
General grants
Specific grants
Sum of grants
Ministry of Finance Sweden
Specific purpose grants 2003-2008
0
5
10
15
20
25
30
35
2003 2004 2005 2006 2007 2008
Municipalities County councils
Ministry of Finance Sweden
Grants as proportion of local government income
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2003 2004 2005 2006 2007 2008
General grants
Specific purpose grants
Sum of grants
Ministry of Finance Sweden
Conclusions
• The grant reform of the 1990’s had impact on the policy mix between conditional and general grants.
• Speficic purpose grants fell from 17 % of local governments income in 1992 to 7 % in 1993.
Ministry of Finance Sweden
• The number of conditional grants grew between 1993 and 2001.
• But declined slightly thereafter.• Especially grants intented for a
particular group of municipalities and county councils.
• Could be harmful to equalisation and economic efficiency.
Ministry of Finance Sweden
The last five years
• Grants from the central government accounted for 15 % of local government income in 2008.
• Specific purpose grants have grown in size, and to a certain extent in numbers, but their significance as a source of finance has in fact declined of lated.
• Specific purpose grants represent app. 7-8 % of local governments income (2003-2008).
• General grants slightly bigger.
Ministry of Finance Sweden
The composition of the specific grants has changed
• In the last five years, specific purpose grants have grown more important for county councils
• Specific grants have declined in significance for the municipalities compared to the early 1990’s