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Fiscal equalisation refers to the transfer of financial resources to and between subnationalgovernments with the aim of mitigating regional differences in fiscal capacity andexpenditure needs. However, the determination of fiscal capacity and expenditure needs isnot a straightforward task. OECD countries use widely varying mechanism designapproaches in their equalisation systems. This paper compares national approaches,covering the three modes of fiscal equalisation: pure revenue equalisation, revenue/costequalisation and gap-filling equalisation, describing the distinct impacts of each approachon subnational revenue disparities. A clear inverse relationship emerges between the sizeof the cost-equalising component within a system and the percentage change in subnationalper capita revenue disparities after equalising transfers are applied, although nosignificant relationship emerges between equalisation and regional convergence.Keywords: fiscal federalism, fiscal equalisation systems, inter-governmental transfers,regional inequality, public economics.

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The Coronavirus pandemic has put extreme pressure on public health services,often delivered at the local and regional levels of government. The paper focuses on how countries made changes to the configuration of federalism during the first wave of the pandemic. These changes typically have involved the centralisation and decentralisation of certain health-related activities, as well as the creation of new coordination and funding mechanisms. Specific tools that have been used include an enhanced role of the executive branch (“executive federalism”), the use of centres of government for vertical coordination, as well as the introduction of unique state-of-emergency laws. New horizontal coordination arrangements have also emerged with the more decentralised approaches. The strengths, weaknesses and implementation risks of various approaches are analysed using country examples.