Overlapping debt is when the debt issued to finance the activities of the government falls on several political jurisdictions, while the joint debt is distributed among them.
Overlapping debts are quite common among various levels of local government in the US with special boroughs and fiscal agencies for things like schools and public infrastructure that overlap with multiple municipalities.
The amount of overlapping debt can affect the cost of borrowing and the credit rating of the municipal government.
The use of overlapping debt and fiscal bodies tends to bias local government towards higher total spending, total debt, and a higher tax burden.
Economic efficiency is when every scarce resource in the economy is used and distributed between producers and consumers in such a way as to provide the greatest economic return and benefit to consumers.
The “golden rule” of public spending is fiscal policy, which says that the government should increase borrowing only in order to invest in projects that will pay off in the future.
A member of the World Bank Group, the International Finance Corporation (IFC) provides financing for investment by private enterprises in developing countries.