Verardi, Vincenzo; Bouton, Laurent; Gassner, Marjorie - Solvay Brussels School of Economics and Management, … - 2008
From the literature on decentralization, it appears that the fiscal vertical imbalance (i.e. the dependence of sub-national governments on national government revenues to support their expenditures) is somehow inherent to multi-level governments. Using a stylized model we show that this leads to...