We compare the optimal insurance contribution rate and welfare levels for two opposite social insurance systems: a beveridgean one and a bismarckian one. The social contribution rates are decided by majority voting rule in both cases. In a model where agents earn heterogeneous incomes, we...

In this article, we endogenously derive the soft budget constraint phenomenon in a federation when fiscal decisions are delegated to regions. In this framework, the softness of the regional budget constraint results from federal government cross-subsidization objective. We analyse the impact of...