Since sub-national governmental bodies are almost always financially dependent on the larger national government, inter-governmental transfers of finance are an important aspect of a country's political economy that can also be utilized to serve wider policy goals, according to Boadway (economic theory, Queen's U., Ontario, Canada) and Shah (Public Sector Governance Program of the World Bank Institute, Washington, DC, US). In this volume, they present 13 contributions that explore these theoretical principles and real-world practices of intergovernmental financial transfers. Topics addressed in the section on principles include equity and efficiency aspects of interagency transfers in a multigovernment framework, achieving economic stabilization by sharing risk within countries, grants and soft budget constraints, the political economy of interregional grants, and the incentive effects of grants. The more empirical chapters include exploration of legal architectures; institutional arrangements; issues in tax sharing; macro formulas for fiscal equalization; financing capital expenditures through grants; and grants to large metropolitan, small urban, and rural local governments. Annotation ©2007 Book News, Inc., Portland, OR (booknews.com)