Countries redistribute substantial amounts of wealth between regions through taxation and social security, even in the absence of an explicit regional policy. Economic theory suggests such redistribution might be distorting. This paper indeed finds that more redistribution leads to subsequent...

Equalization transfers from central to sub-central governments are a pervasive feature of nearly all systems of multi-level government. Not surprisingly, in many federal countries such as Canada and Germany, major programs transfer resources from more wealthy jurisdictions to those with...