Resource title

Why do differences in the degree of fiscal decentralization endure?

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image for OpenScout resource :: Why do differences in the degree of fiscal decentralization endure?

Resource description

Differences in the degree of fiscal decentralization observed between the U.S. and many countries in Europe cannot be explained within the standard theory of fiscal decentralization. By introducing preferences for solidarity equality in the provision of public goods and services across regions we show that different decentralization schemes can coexist as efficient choices. We develop a model of fiscal decentralization that incorporates tastes for solidarity, multiple levels of government, and various tax and transfer instruments. We find that when solidarity is added to the traditional fiscal-federalism framework, the choice along the decentralized-to-centralized spectrum shifts toward a more centralized system.

Resource author

Xavier Calsamiglia, Teresa Garcia-MilĂ , Therese J. McGuire

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25922

Resource license

Adapt according to the presented license agreement and reference the original author.