This paper shows that the federal government can always achieve the second-best optimum of public good provision, but a precise evaluation of the fiscal gap requires an explicit consideration of the underlying fundamentals of the federal economy.

When estimating location choices, Poisson regressions and conditional logit models yield identical coefficient estimates (Guimarães et al., 2003). These econometric models involve polar assumptions as regards the similarity of the different locations. Schmidheiny and Brülhart (2011)...