The paper considers a model of a federation with two heterogeneous regions that try to attract the capital by competing in capital income taxes and public investment that enhance the productivity of capital. The regions' choices determine the allocation of capital across the regions and their...

The European economic integration leads to increasing mobility of factors, thereby threatening the stability of social transfer programs. This article investigates the possibility to achieve by means of voluntary matching grants both the optimal allocation of factors and the optimal level of...

In this paper we explore how political pressures for an increased decentralisation of revenue and expenditure competencies to sub-national governments may affect the degree of interregional redistribution accomplished by the public sector. We do this by focusing on a specific case, that of the...

This paper questions the effectiveness of matching grants to correct for interjurisdictional spillovers in the light of Bernheim general neutrality result. Indeed this result suggests that the usual argument that matching grants are needed to internalize the externality arising from the...

European economic integration leads to increasing factor mobility, thereby threatening the stability of social transfer programs. This paper investigates the possibility of achieving, by means of voluntary matching grants, both the optimal allocation of factors and the optimal level of...

We take a decentralized approach to regulating environmental pollution in settings where each agent's pollution possibly affects all others. There is no central agency to enforce pollution abatement or coordinate monetary transfers. Moreover, agents possess private information, which precludes...

The paper reconsiders the theory of fiscal federalism in a framework inspired by property-rights theory. We set up a two-period model where on a first stage a region in a federation can expend value-enhancing investments into a public project. The project can be implemented on a second stage,...

Most countries pay substantial intergovernmental transfers to poor regions. Since these transfers are often paid with the aim of achieving regional convergence, they should have a positive effect on economic growth. However, it is equally possible that transfers perpetuate under-development by...

For almost two decades, starting from the early ‘90s, Italy experienced the strongest wave of decentralization reforms in its post II World War history. The causes were both economic and political. Yet, in recent years, again economic and political causes seem to call for opposite reforms....

This paper, part of a larger project on governance and growth in Russia. It deals with the problems and priorities of the future development of primary producer regions of Russia. We design a regional strategy for socioeconomic development to 2025-2030. The analysis concerns growth and...