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In this paper, we take up the question why a group of sovereign countries is willing to form a federation even if residents of the high-income region suspect potential immigrants to be net beneficiaries of the tax and transfer system. We argue that income uncertainty alone cannot satisfactorily...
Persistent link: https://www.econbiz.de/10010296313
In the context of EMU fiscal equalization schemes have been proposed as a means to stabilize regions against asymmetric shocks. A theoretical analysis shows that besides reducing the cross-sectional income variance the redistributive element of fiscal equalization causes incentive effects for...
Persistent link: https://www.econbiz.de/10010297892
The paper addresses the welfare implications of conditional grants if government failure leads to inefficiencies in the production of regional public goods and services. Conditional grants may improve welfare by setting incentives for regions to improve efficiency. At the same time, resources...
Persistent link: https://www.econbiz.de/10010298041
In this paper we use a simple bureaucracy model of fiscal illusion to analyze the impact of intergovernmental grants on the cost efficiency of local jurisdictions. We find that a higher degree of redistribution within a system of fiscal equalization or an increase in the amount of grants...
Persistent link: https://www.econbiz.de/10010298062
This paper analyses and compares the efficiency of alternative incentive compatible grant schemes under asymmetric information relieving subnational governments of excessive debt burden. They allow intervention into local debt, local tax or complete local fiscal policy. In the first case,...
Persistent link: https://www.econbiz.de/10010299887
föderalen Finanzausgleich zu kreieren bzw. aufgrund hinzugetretener Herausforderungen weiterzuentwickeln. Die Implementierung … eindeutiges Bild: das System des ungarischen föderalen Finanzausgleichs ist gemessen an den aus der ökonomischen Theorie des … fiskalischen Föderalismus abgeleiteten Anforderungen an einen optimalen föderalen Finanzausgleich zu reformieren. Betrachtungen …
Persistent link: https://www.econbiz.de/10010301333
The paper derives a normative model for partial fiscal equalisation based on a number of axioms and makes special allowance for the existence of a specific fiscal need in the jurisdictions. A simple version of this idealised equalisation scheme relates net contributions to the equalisation funds...
Persistent link: https://www.econbiz.de/10010301344