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 …