Redistribution as a Local Public Good: An Empirical Test for Flemish Municipalities.

Redistribution is typically viewed to be a task of central governments. Still, many local governments do have some discretion in redistribution policy. The main theoretical argument is that redistribution may be a local public good. Using data on Flemish municipalities, we present an empirical test of Pauly's assumption. We find that the willingness to redistribute is negatively affected by the geographical dimension of the jurisdiction. We also consider sociological, cultural, income and political distances between donors and recipients. With the exception of income, all these are relevant determinants of welfare policy, though they do not always have the predicted effect. Copyright 2002 by WWZ and Helbing & Lichtenhahn Verlag AG