There is much evidence against the so-called quot;too big to failquot; hypothesis in the case of bailouts to subnational governments. We look at a model where districts of different size provide local public goods with positive spillovers. Matching grants of a central government can induce...

This paper develops a model of Tiebout sorting with decentrally determined progressive income taxation and a built-in fiscal equalization scheme that redistributes money from richer to poorer regions. Both aspects are central to policy makers: the progressivity for equity reasons and the fiscal...

This paper develops a model of local income tax competition with a progressive tax scheme and a built-in fiscal equalization scheme. Both aspects are central to policy makers: The progressivity for equity reasons, and the fiscal equalization to prevent a race to the bottom and to limit the...

Property taxes are the primary funding mechanism by which local governments pay for public goods. In the United States, the federal income tax system provides a subsidy to this cost by allowing taxpayers to deduct property taxes on their federal income tax returns. Using local referendum...

This paper examines how regional disparities have evolved in Russia and how Russia's system of intergovernmental fiscal relations is managing these disparities. Regional disparities have fallen over the past two decades but remain relatively high. Socioeconomic outcomes remain worse in lagging...