We propose a theory of tax centralization and inter governmental grants in politico-economic equilibrium. The cost of … differently across levels of government, inter governmental grants become relevant. Calibrated to U.S. data, our model helps to … explain the introduction of federal grants at the time of the New Deal, and their increase up to the turn of the twenty …

We propose a theory of tax centralization and inter governmental grants in politico-economic equilibrium. The cost of … differently across levels of government, inter governmental grants become relevant. Calibrated to U.S. data, our model helps to … explain the introduction of federal grants at the time of the New Deal, and their increase up to the turn of the twenty …

spending and taxation and create a role for inter governmental grants. The model provides an explanation for the centralization … of revenue, introduction of grants, and expansion of federal income taxation in the U.S. around the time of the New Deal …-term increase in federal grants. …