Crivelli, Ernesto; Staal, Klaas - In: International Tax and Public Finance 20 (2013) 2, pp. 338-356
There is much evidence against the so-called “too big to fail” hypothesis in the case of bailouts to subnational governments. We look at a model where districts of different size provide local public goods with positive spillovers. Matching grants of a central government can induce...