Overlapping soft budget constraints

Our paper identiï¬es a potential problem with decentralization at a time when its virtues are widely extolled. We show that responsibility for equalization at multi-levels within a decentralized federation creates an overlapping equalization policy that can worsen ï¬scal discipline. Contrary to Qian and Roland (1998), we also show in our set-up that ï¬scal competition among regional rescuers does not act as a commitment device to harden the local budget constraint.

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Year of publication:	2010
Authors:	Breuille, Marie-Laure ; Vigneault, Marianne
Institutions:	Département Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2), Institut National de la Recherche Agronomique (INRA)
Subject:	SOFT BUDGET CONSTRAINT \| FISCAL FEDERALISM \| CAPITAL TAX COMPETITIONÂ \| DECENTRALISATIONÂ \| fiscalité \| collectivité territoriale \| fiscalité locale

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Notes:	JEL Classification E62; H7 Published in Journal of Urban Economics 259 pages long269
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011170461