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This paper uses a simple model of fiscal competition between local jurisdictions to analyse the impact of intergovernmental grants on the composition of public spending. We find that a higher degree of redistribution within a system of ʺfiscal equalisationʺ coincides with a smaller overall...
Persistent link: https://www.econbiz.de/10003412064
Several recent studies suggest that equalizing transfers in a federal system may distort the tax policy decisions of states. We study this issue for the German federal fiscal system. In a simple theoretical model, we first identify a substitution and an income effect of equalizing transfers. Our...
Persistent link: https://www.econbiz.de/10013321121
this pattern and tests them in a natural experiment from Germany. The first hypothesis is that fiscal redistribution …
Persistent link: https://www.econbiz.de/10011929809
actually favors stabilization. In an empirical analysis for Germany, the paper adds support for the finding of significant … regional stabilization by fiscal flows. The results indicate that about 17 % of GDP variation across West Germany's states has … been removed by fiscal flows during the last two decades. Thus, in Germany where the fiscal federalism is criticised for …
Persistent link: https://www.econbiz.de/10013428245
actually favors stabilization. In an empirical analysis for Germany, the paper adds support for the finding of significant … regional stabilization by fiscal flows. The results indicate that about 17 % of GDP variation across West Germany's states has … been removed by fiscal flows during the last two decades. Thus, in Germany where the fiscal federalism is criticised for …
Persistent link: https://www.econbiz.de/10011442662
We test the hypothesis that the flypaper effect can arise if the recipient government finances part of its expenditures with a distortionary tax. We present a simple theoretical framework that shows how a lump-sum transfer stimulates the marginal expenditures of a recipient government through an...
Persistent link: https://www.econbiz.de/10009571280
The advantages and disadvantages of public sector decentralization are widely discussed in economics and political science. Some authors argue that decentralization leads to an optimal provision of public services and promotes economic growth, while others emphasize the dangers of competition...
Persistent link: https://www.econbiz.de/10012721515
- can be of help to improve state-level finances in Germany. The state of Schleswig-Holstein is used as a case study to …
Persistent link: https://www.econbiz.de/10013106798
that the redistribution of revenues provides incentives for states to raise rather than to lower their tax rates. The … simulation model, the paper computes the tax-policy incentives faced by each state over the years and explores their empirical …
Persistent link: https://www.econbiz.de/10012908652
The advantages and disadvantages of public sector decentralization are widely discussed in economics and political science. Some authors argue that decentralization leads to an optimal provision of public services and promotes economic growth, while others emphasize the dangers of competition...
Persistent link: https://www.econbiz.de/10003851100