Critical-level (CL) utilitarianism with both fixed and variable critical levels is applied to the problem of redistribution in a federation with free mobility. We are interested in intra-regional inequality when redistribution policies are organized decentrally in a federation. Due to free...

We study the strategic incentives of regional governments to allocate their budget to public investment and to public consumption expenditures against the background of an incentive-compatible redistribution policy set by the central government. Regional investment changes the productivity...