This paper analyzes whether changes in the timing of equalizing transfers to state governments necessitate an adjustment in federal corrective policy. According to the existing literature (assuming an ex-ante choice of transfers), the corrective grant is equal to the marginal damage/benefit...

This paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment. Lack of commitment implies that tax policy is chosen prior to federal transfers. The paper s main result is that ex-post federal policy internalizes horizontal fiscal...

Musgravian externalities, formulated and illustrated by Musgrave in a 1966 paper on social goods are seen in this paper as one form of the interactions that occur between the components of a federation. The original formal apparatus is first exposed briefly. In that context, it is then...

"Musgravian" externalities, formulated and illustrated by Musgrave in a 1966 paper on "social goods" are seen in this paper as one form of the interactions that occur between the components of a federation. The original formal apparatus is first exposed briefly. In that context, it is then...

One of the newer suggestions for the design of public economic units refers to Functional Overlapping Competing Jurisdictions (FOCJs), which are instruments to shape cooperation of jurisdictions, e.g. municipalities.The study clarifies important types of FOCJ. It concentrates on FOCJs where the...

Competition among local governments in a decentralized political system is often thought to discipline lazy or corrupt officials, improving public good provision and increasing welfare. Some scholars note possible distortions due to spillovers or a race-to-the-bottom, but suggest that central...

Should a subset of member states of a federation be allowed to form a sub-union on some policy issue? When centralization is not politically feasible, allowing an enhanced cooperation agreement among a subset of countries permits the latter to gain benefits which would otherwise be lost....

Federal fiscal arrangements are argued to give rise to tacit collusion among competing Leviathans (Brennan and Buchanan, The Power to Tax, CUP, 1980). Though frequently encountered in academic and policy discussions, the cartelization hypothesis has rarely been scrutinized formally. This paper...