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The Fiscal Crisis Down Below

PALO ALTO – Sub-national governments – states, countries, cities, provinces, towns, and special districts – play different roles from country to country, but usually deliver important public services such as police and fire protection, transportation, education, health care, and welfare. In many countries, their fiscal position has collapsed under the combined weight of mismanagement and the global economic and financial crisis.

The relationship between sub-national and central governments includes the general division of responsibilities for providing and financing public services; national subsidies that at least partly pay for various services delivered locally; and tax collection.