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Redistribution within and across the Regions of a Federation

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  • John B. Burbidge
  • Gordon M. Myers

Abstract

The authors reconsider the literature on redistribution within a federation with mobile agents. They conclude that redistribution is a function best assigned to the national government; local governments with diverse preferences for redistribution distort individual migration decisions. The authors also examine the fiscal externality literature, which has made an efficiency argument for interregional transfers. They show that, if local governments have the same preferences for redistribution, the Nash equilibrium is efficient. If preferences are diverse, the authors show that nationally imposed interregional transfers do not address the source of the inefficiency. Nevertheless, interregional transfers are shown to be a part of decentralized behavior.

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Bibliographic Info

Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 27 (1994)
Issue (Month): 3 (August)
Pages: 620-36

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Handle: RePEc:cje:issued:v:27:y:1994:i:3:p:620-36

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Citations

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Cited by:
  1. Gordon M. Myers & Yorgos Y. Papageorgiou, 2000. "Towards a Better System for Immigration Control," Discussion Papers dp00-17, Department of Economics, Simon Fraser University, revised Sep 2000.
  2. Arman Mansoorian, 1996. "Risk Sharing and Redistribution in a Federal System with Population Mobility," Working Papers 1996_03, York University, Department of Economics.
  3. Wellisch, Dietmar & Walz, Uwe, 1998. "Why do rich countries prefer free trade over free migration? The role of the modern welfare state," European Economic Review, Elsevier, vol. 42(8), pages 1595-1612, September.
  4. Alessandra Casella, 2002. "Redistribution policy: A European model," Discussion Papers 0203-06, Columbia University, Department of Economics.
  5. Seija Parviainen, 1998. "Redistribution and Risk Sharing in EMU," Discussion Papers 159, Government Institute for Economic Research Finland (VATT).
  6. Kjetil Bjorvatn, 1998. "Taxation and Migration in a Federal System," International Tax and Public Finance, Springer, vol. 5(3), pages 345-355, July.
  7. Andreas Pfingsten & Andreas Wagener, 1997. "Centralized vs. Decentralized Redistribution: A Case for Interregional Transfer Mechanisms," International Tax and Public Finance, Springer, vol. 4(4), pages 429-451, November.
  8. Joan Rosselló, 2003. "Regional redistribution and growth," Investigaciones Economicas, Fundación SEPI, vol. 27(2), pages 369-392, May.
  9. Petchey, Jeffery & Shapiro, Perry, 2003. "Policy Competition, Factor Mobility and Multiple Policy Instruments: Existence and Non-Existence of Equilibrium," University of California at Santa Barbara, Economics Working Paper Series qt5421r6cc, Department of Economics, UC Santa Barbara.
  10. Motohiro Sato, 2000. "Fiscal Externalities and Efficient Transfers in a Federation," International Tax and Public Finance, Springer, vol. 7(2), pages 119-139, March.
  11. Arman Mansoorian, 1999. "Risk Sharing in a Federation with Population Mobility and Long Horizons," Working Papers 1999_03, York University, Department of Economics.
  12. Silva, Emilson C. D., 1997. "Decentralized and Efficient Control of Transboundary Pollution in Federal Systems," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 95-108, January.
  13. repec:ind:nipfwp:16 is not listed on IDEAS
  14. Feld, Lars P, 2000. " Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland," Public Choice, Springer, vol. 105(1-2), pages 125-64, October.
  15. Myers, Gordon M. & Papageorgiou, Yorgos Y., 1997. "Efficient Nash equilibria in a federal economy with migration costs," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 345-371, August.
  16. Huizinga, Harry, 1999. "A two-region model of redistribution, migration and international trade," Journal of Public Economics, Elsevier, vol. 71(3), pages 335-354, March.
  17. Wagener, Andreas, 2000. "Variable population size issues in models of decentralized income redistribution," Regional Science and Urban Economics, Elsevier, vol. 30(6), pages 609-625, December.
  18. Bagchi, Amaresh & Chakraborty, Pinaki, 2004. "Towards a rational system of centre-state revenue transfers in India: An exploration," Working Papers 04/16, National Institute of Public Finance and Policy.
  19. Berliant, Marcus & Rothstein, Paul, 2000. "On Models with an Uncongestible Public Good and a Continuum of Consumers," Journal of Urban Economics, Elsevier, vol. 48(3), pages 388-396, November.

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