Federal Governments Should Subsidize State Expenditure that Voters do not Consider when Voting

This short paper analyzes whether a federal transfer system can be designed to increase welfare, when state governments create political budget cycles to increase the likelihood of reelection. The results show how the federal government may announce a transfer scheme in advance for the post-election year that counteracts the welfare costs of political budget cycles.

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Year of publication:	2014-11-13
Authors:	Aronsson, Thomas ; Granlund, David
Institutions:	Institutionen för Nationalekonomi, Umeå Universitet
Subject:	Political economy \| intergovernmental transfer \| budget cycle

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Extent:	application/pdf
Series:	Umeå Economic Studies.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Umeå Economic Studies Number 898 10 pages
Classification:	D61 - Allocative Efficiency; Cost-Benefit Analysis ; D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legistures, and Voting Behavior ; H71 - State and Local Taxation, Subsidies, and Revenue
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010961528