We develop a model with two provinces, producing two goods: one mobile and the other not. The mobile good is taxed according to the destination principle by the local government; it is also federally taxed. People decide to buy the good at the most advantageous price. Namely they can buy...

Article about the problems of municipal governments related to fiscal consolidation in the Russian regions and the construction of the vertical of power during the first presidency of Vladimir Putin. The author analyzes the impact of the decline of the financial base of the city governments and...

Recent attempts of "regionalizing" the VAT, in order to expand fiscal autonomy margins attributed to Regions and to involve them in the hard struggle against tax evasion, strongly urge some considerations on some of the changes introduced in the Italian legal system by the 2001 constitutional...

The paper’s aim is to link two different issues: equalization and fiscal competition. In the model there are two regions: the first one has rich citizens and the other one has poor citizens. Regional representatives in a federal Council must decide on the introduction of an equalization...

The aim of this paper is to determine to what extent and how federal taxes affect local tax decisions. Testing the impact of an increase in the federal tax on horizontal tax competition with Canada-US data for 1984--1994, we find evidence that an increase in federal tax affects horizontal tax...

The second generation fiscal federalism (SGFF) approach is used as a reference to analyze the political and fiscal institutional design of Bolivia’s decentralization model and its evolution. Subnational public finance data up to 2008 is used to verify that decentralization of expenditure was...

We use the same methodology, that Ecofin-Oecd apply for projecting expenditure in the medium-long term, to reconstruct expenditure in the medium-long past. It is possible to compare the effective expenditure with the reconstructed one. The effective expenditure is of course influenced by policy...

Federal transfers can depend on local fiscal capacity which is measured by local tax bases. The aim of this paper is to understand to what extent and how these transfers affect local tax decisions. We develop a model with two provinces producing one mobile good. The good is taxed according to...

The theory of fiscal federalism makes a strong case for decentralizing government functions in order to enhance the efficiency of allocating public goods where preferences differ among regions. Decentralized collective decision making fosters social and political cohesion at the level of the...

Theory suggests that transfers should have an effect on local fiscal policy that is similar to an equivalent increase in local incomes. Yet much of the empirical literature shows that local governments use transfers primarily to increase expenditures. Recent contributions have revisited this so...