Many countries apply cost-equalization and/or fiscal capacity equalization formulas to enable sub-national governments to provide comparable service standards at comparable tax rates. This paper demonstrates how measures of expenditure needs and fiscal capacity can be derived from a structural...

The purpose of this paper is to study the impact of including the value of public health care, longterm care, education and childcare on estimates of income inequality and financial poverty in 23 European countries. The valuation of public services and the identification of target groups rely on...

Despite a broad consensus on the need to take into account the value of public services in distributional analysis, there is little reliable evidence on how the inclusion of such non-cash income actually affects poverty and inequality estimates. In particular, the equivalence scales applied to...

This paper treats local governments as utility maximizing agents when they allocate resources among different service sectors. We present estimates for eight service sectors, based on a modified version of the extended linear expenditure system (ELES) and using observations at the municipal...

The standard practice in most OECD countries is to measure and evaluate poverty on the basis of a poverty line defined as a specific proportion of the median equivalent income within a country. However, this approach disregards regional differences in prices and needs within a country and may,...

Governments that pursue welfare and equalization goals frequently target cash transfers to individuals that suffer from limited economic opportunities and poverty. To achieve the desired allocation of welfare benefits, evaluation of individual needs is thus required. However, the political...

Despite a broad consensus on the need to account for the value of public services and geographical cost of living differences on the measurement of poverty, there is little reliable evidence on how these factors actually affect poverty estimates. Unlike the standard approach in studies of the...

Fiscal disparities arise from differences in costs and capacity to produce a standard package of public services. This paper proposes to use a structural modelling approach as basis for measuring fiscal disparities across municipalities. This approach differs from the widely used reduced-form...

A cooperative bargaining model is adapted to the setting of local government in Norway. Aggregate consumption, the capital stock and net financial wealth in the local public sector are endogenized. The origin of intertia in the model is ascribed to incrementalism or adjustment costs in the...

When private goods are publicly provided at subsidized prices, government authorities have to determine the distribution of services on recipients. Such distributions are commonly based on legal regulations and professional guidelines. Thus governments are assumed to develop service standards...