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We develop a model of Tiebout sorting based on decentralized income taxation, which allows for spillovers and imperfect rivalry in consumption of the publicly provided good. We identify three sources of welfare loss from decentralization: Imperfect redistribution, inter-jurisdictional...
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For decades the rhetoric of federalism has been an important part of the debate over welfare reform. The alignments … alignments and the stereotyped quality of most federalism rhetoric, skeptics might argue that this is an arena in which “the …, the abstractions comprising the rhetoric of federalism serve to mask conflicts and lead us to apply our normative concerns …
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We extend the literature on local income tax competition by allowing for inter-jurisdictional spillovers and imperfect rivalry in consumption of a publicly provided good. Comparing decentralized second-best results of a theoretical model with an efficient benchmark, we identify three...
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This paper analyses and compares the efficiency of alternative incentive compatible grant schemes under asymmetric information relieving subnational governments of excessive debt burden. They allow intervention into local debt, local tax or complete local fiscal policy. In the fist case,...
Persistent link: https://www.econbiz.de/10003923749
Does a monetary union need fiscal shock absorbers helping the participating countries to cope with asymmetric shocks? The consensus in the debate over EMU argues that the answer is yes. In this paper, we revisit the issue, building on a dynamic, general equilibrium framework of regions in a...
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