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Is Vertical Fiscal Imbalance so Inefficient? or, The Flypaper Effect is not an Anomaly

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Author Info

  • Geoffrey Brennan
  • Jonathan Pincus

    (School of Economics, University of Adelaide)

Abstract

This paper re-examines criticisms made of vertical fiscal imbalance in Australian and other federations. We argue that one of the central criticisms made of vertical fiscal imbalance is unproven. Vertical fiscal imbalance occurs when the central government collects more taxes than it spends on its own purposes; when that states collect less in tax than they spend; and the differences represent grants from the central government to the states (and local governments).

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File URL: http://www.economics.adelaide.edu.au/research/papers/doc/wp1998-06.pdf
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Bibliographic Info

Paper provided by University of Adelaide, School of Economics in its series School of Economics Working Papers with number 1998-06.

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Length: 13 pages
Date of creation: 1998
Date of revision:
Handle: RePEc:adl:wpaper:1998-06

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Postal: Adelaide SA 5005
Phone: (618) 8303 5540
Web page: http://www.economics.adelaide.edu.au/
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Related research

Keywords: Australia; public finance;

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Cited by:
  1. Santiago Lago, . "Descentralización fiscal, nivelación interterritorial y externalidades presupuestarias: Perspectiva analítica y reflexiones para el caso español," Studies on the Spanish Economy 130, FEDEA.

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