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The Decentralization Theorem (Oates, 1972) is central to the discussion of fiscal federalism. We revisit the role of … consumption spillovers in evaluating the merits of (de)centralization. Unlike the general prediction, a higher degree of … spillovers may reduce the difference in utility of centralization and decentralization. The non-monotonicity result relates to …
Persistent link: https://www.econbiz.de/10013316807
The fiscal decentralization impulse now sweeping the world often leads to partial decentralization, where subnational governments are funded by central transfers, rather than leading to full local autonomy. Despite the practical importance of this arrangement, the literature contains no economic...
Persistent link: https://www.econbiz.de/10013316771
Federal and state governments often differ in the capacity to pre-commit to expenditure and tax policy. Whether the implied sequence of public decisions has any efficiency implications is the subject of this paper. We resort to a setting which contrary to most of the literature does not exhibit...
Persistent link: https://www.econbiz.de/10013316943
Two different forms of regional conflict occur in a federation: conflict of taste and conflict of claim. These conflicts may support each other but not necessarily – they are independent in concept and have different implications for regional tensions. Conflict of taste arises from differences...
Persistent link: https://www.econbiz.de/10012892290
International comparisons show that the reasons why e-government development in Germany does not occupy the desired “top spot” in rankings lie primarily in the inadequate provision of online services with little corresponding user orientation. In order to provide better and faster public...
Persistent link: https://www.econbiz.de/10014261030
This paper exploits a recent devolution of tax setting powers in the German federation to study the effects of fiscal equalization on subnational governments’ tax policy. Based on an analysis of the system of fiscal equalization transfers, we argue that the redistribution of revenues provides...
Persistent link: https://www.econbiz.de/10012908652
Based on the fiscal regime that prevailed in Argentina from 1988 to 2003, we estimate the effects that changes in intergovernmental transfers and hydrocarbon royalties had on provincial public consumption and debt. From a one-peso increase in intergovernmental transfers, all provinces spent 76...
Persistent link: https://www.econbiz.de/10013215671
Using the exogenous variability in intergovernmental transfers and hydrocarbon royalties, based on the fiscal regime that prevailed in Argentina from 1988 to 2003, we jointly estimate the effects that changes in these public revenues had on provincial public consumption and debt. When receiving...
Persistent link: https://www.econbiz.de/10012871018
-tier (horizontal) and between-tiers (vertical and diagonal) fiscal externalities. Estimation of an unrestricted income tax reaction …
Persistent link: https://www.econbiz.de/10013213781
This paper discusses the historical and social origins of the bifurcation in the political institutions of China and Western Europe. An important factor, recognized in the literature, is that China centralized state institutions very early on, while Europe remained politically fragmented for...
Persistent link: https://www.econbiz.de/10014357030