In fiscal federal systems, local public works that generate spillovers are often financed by transfers from higher levels of government. In this article, we consider a governmental hierarchy composed by a Federal and a Local Government. The former delegates to the latter the task of finding a firm to undertake a local public work. As the Local Government has more information about the efficiency of the firm, it communicates its private information to the Federal Government which decides the way to fund the project.
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Length: 35 pages Date of creation: 2000 Date of revision: Handle: RePEc:fth:gemame:2000/01
Contact details of provider: Postal: UNIVERSITE DE LIEGE, Faculte d'economie, de gestion et de sciences sociales, Groupe d'Etude des Mathematiques du Management et de l'Economie. 4000 Liege, BELGIQUE Web page: http://www.sig.egss.ulg.ac.be/gemme/ More information through EDIRC
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Martin Besfamille, 2000.
"Fiscal federalism, local public works and corruption,"
CREPP Working Papers
0001, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
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Find related papers by JEL classification: D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
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