Struggles over what a region receives, or should receive, from the budget of the central government are common to many countries. Discussions often focus on the measures of ‘net fiscal flows’ or ‘fiscal balances’ provided by the government or other actors. This unique...

In this paper we use an endogenous-growth model with human capital and heterogeneous agents to analyse the relationship between fiscal federalism and economic growth. The results show that federalism, which allows education-related public good levels to be tailored to the local distribution of...