Efficiency and Equalization Payments in a Federal System of Government: A Synthesis and Extension of Recent Results

Boadway, Robin; Flatters, Frank

doi:10.2307/134918

Cited by 313 publications

(228 citation statements)

References 22 publications

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“…He emphasizes that the redistributive power of sub-national governments will lead to political programs that do not conform to the national interest. Moreover, sub-national redistributive power will result in fiscal competition with a sub-optimal outcome from a national equity point of view [see also Boadway and Flatters (1982)]. Another argument is related to the budgetary power of central and local governments.…”

Section: The Theoretical Link Between Decentralization and Regional Dmentioning

confidence: 99%

Fiscal Decentralization and Regional Disparity: Evidence from Cross-Section and Panel Data

Leßmann

2009

Environ Plan A

117

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The advantages and disadvantages of public sector decentralization are widely discussed in economics and political science. Some authors argue that decentralization leads to an optimal provision of public services and promotes economic growth, while others emphasize the dangers of competition between sub-national governments, especially those associated with interregional redistribution. Using cross-section and panel data for 23 OECD countries from 1982 to 2000, this paper empirically studies the impact of fiscal decentralization on regional disparities. We find that a higher degree of decentralization is associated with lower regional disparities. Hence, poor regions experience no disadvantages from decentralization and instead appear to benefit. JEL-Classification: H72; H77; R11; R50 Terms of use: Documents in

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Section: The Theoretical Link Between Decentralization and Regional Dmentioning

confidence: 99%

Fiscal Decentralization and Regional Disparity: Evidence from Cross-Section and Panel Data

Leßmann

2009

Environ Plan A

117

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“…However, we should mention that stability of the migration equilibrium requires the denominator N to be negative, ^ -N < 0. Instability arises in the case of an underpopulated federal economy [see Stiglitz (1977) and Boadway and Flatters (1982)]. If a socially efficient population distribution is achieved, stability requires that the equalized marginal net benefit of mobile households to both regions (from the viewpoint of the single region), f l n -^ n J u 'J nn + ^ + n,n 'J" n , must be negative.…”

Section: Social Optimummentioning

confidence: 99%

“…Typically, previous models on this subject ignore any mobility of households across regions. 1 Another approach in the literature analyzes the supply of regional (or local) public goods without spillovers in the presence of highly mo bile households [see, e.g., Hartwick (1980), Boadway (1982), Boadway and Flatters (1982), Wildasin (1980) and(1986), and Myers (1990)]. Recently, Myers (1990) has demonstrated that in a Nash-equilibrium of competing regional governments not only is an optimal supply of regional public goods (without spillovers) achieved, but also an optimal distribution of mobile households across regions.…”

Section: Introductionmentioning

confidence: 99%

On the decentralized provision of public goods with spillovers in the presence of household mobility

Wellisch¹

1993

Regional Science and Urban Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. When households are immobile among regions, the decentralized provision of public goods that generate interregional benefit spillovers is inefficiently low. A model of interregio^ial migration is used to study the provision of such services in the presence of free mdbility of households. Terms of use: Documents in EconStor mayWithin this model we find a surprising result: the Nash-equilibrium of competing regional governments is socially efficient. Though only maximizing the utility of their own residents, regional governments perfectly internalize the externalities associated with their provision of public goods. There is no role for a higher-level government to encourage the supply of public goods by a Pigovian subsidy.

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“…However, the allocation of labour across regions will generally not be efficient. Transfers between regions, if determined before regional decisions are made, can be set to induce the efficient allocation of population (Boadway and Flatters, 1982). On the other hand, if transfers are determined after regional policies, regional governments will tend to over-provide regional public goods in order to elicit larger transfers from the federal government.…”

Section: Perfect Mobility With Regional Public Goodsmentioning

confidence: 99%

Non-cooperative pollution control in an inter-jurisdictional setting

Boadway¹,

Song²,

Tremblay³

2013

Regional Science and Urban Economics

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This paper examines various circumstances under which decentralized pollution policies can be efficient both in federal settings and in multi-region settings with labour mobility. We consider a model in which pollution control policies are set by regional governments non-cooperatively and pollution damages are borne by the residents of all regions. We characterize the efficiency of pollution policies, and of population allocation among regions, in a variety of scenarios, including when pollution policies are enacted before interregional transfers are determined by the federal government and before migration occurs; when migration decisions are taken before policy decisions; in the absence of a central government if regional governments can make voluntary interregional transfers; when decisions over pollution control policies are followed by voluntary contributions by regions to a national public good; when regions can commit to matching the abatement efforts of each other; and when regions can commit to specific levels of abatement contingent on the emissions of other regions not exceeding some maximum level.

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Efficiency and Equalization Payments in a Federal System of Government: A Synthesis and Extension of Recent Results

Cited by 313 publications

References 22 publications

Fiscal Decentralization and Regional Disparity: Evidence from Cross-Section and Panel Data

Fiscal Decentralization and Regional Disparity: Evidence from Cross-Section and Panel Data

On the decentralized provision of public goods with spillovers in the presence of household mobility

Non-cooperative pollution control in an inter-jurisdictional setting

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