Centralized vs. Decentralized Redistribution: A Case for Interregional Transfer Mechanisms
AbstractAccording to conventional wisdom, Musgrave's “RedistributionBranch” should be assigned to the central level of governmentin a federation. Otherwise, fiscal externalities created by themobility of the poor would render decentralized redistributioninefficient, if not impossible. The paper objects to this viewand argues that decentralized intraregional redistribution canyield efficient outcomes if it is combined with cleverly designedinterregional transfer mechanisms. Within a general frameworkwe give necessary and sufficient conditions for interregionaltransfer schemes to implement efficient allocations as Nash equilibriaof a decentralized redistribution game. Copyright Kluwer Academic Publishers 1997
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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 4 (1997)
Issue (Month): 4 (November)
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Web page: http://www.springerlink.com/link.asp?id=102915
Decentralization; Redistribution; Fiscal Federalism; Public Funds Sharing;
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