EU Regional Policy: Vertical Fiscal Externalities And Matching Grants
AbstractAlthough decision processes at the EU level are highly complex and often require unanimity, explicit side payments among member states are unknown. However, logrolling and redistributive policies are substitutes. This paper considers the EU regional policy as a substitute for explicit side payments and asks â from a normative and a positive point of view â why matching grants instead of unconditional grants are used although at first sight regional policy is a national and not a union-wide task. It argues that the EU system of own resources creates positive vertical fiscal externalities. Hence, matching grants are part of an efficient grant system and, in so far as bargaining in EU bodies is efficient, matching grants are the natural outcome.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2004 with number 63.
Date of creation: 17 Sep 2004
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Other versions of this item:
- Robert Fenge & Matthias Wrede, 2004. "EU Regional Policy: Vertical Fiscal Externalities and Matching Grants," CESifo Working Paper Series 1146, CESifo Group Munich.
- H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-09-30 (All new papers)
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