01150pab a2200121 454500008004000000100002300040245004600063260000900109300001500118520084800133650002100981773002601002180718b2015   xxu||||| |||| 00| 0 eng d  aAllers, Maarten A.  aThe Dutch local government bailout puzzle  c2015  ap.451-470.  aThe fiscal federalism and public choice literatures stress that government bailouts should be ruled out as they increase the probability that jurisdictions will incur unsustainable debt levels or take excessive risk (moral hazard problem). The recent problems in the euro area seem to confirm this view. However, in the Netherlands, the law explicitly stipulates that local governments which are unable to balance their books will receive a bailout grant. Surprisingly, this does not seem to create problems. Few local governments apply for bailout, and the amounts they receive are modest. We analyse the Dutch case and investigate possible explanations for this apparent anomaly. Our results challenge the dominant view in the literature. It is possible to avoid fiscal irresponsibility by means other than a no-bailout policy. - Reproduced.  aLocal government  aPublic Administration