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Together or Separately? Issues on the Costs and Benefits of Political and Fiscal Unions

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  • Perotti, Roberto
  • Spolaore, Enrico
  • Alesina, Alberto

Abstract

Around the world one observes a tendency toward political separatism. The economic literature generally (but not always) emphasizes several benefits of large fiscal (and, therefore, political) jurisdictions. In this paper we discuss several politico-economic arguments which reconcile this tension between “normative†economic models and empirical observations.

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Bibliographic Info

Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 4553017.

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Date of creation: 1995
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Publication status: Published in European Economic Review
Handle: RePEc:hrv:faseco:4553017

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  1. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
  2. Rubinfeld, Daniel L., 1987. "The economics of the local public sector," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 11, pages 571-645 Elsevier.
  3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  4. Pauly, Mark V., 1973. "Income redistribution as a local public good," Journal of Public Economics, Elsevier, vol. 2(1), pages 35-58, February.
  5. Xavier Sala-i-Martin & Jeffrey Sachs, 1991. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe From the United States," NBER Working Papers 3855, National Bureau of Economic Research, Inc.
  6. Casella, Alessandra & Feinstein, Jonathan, 1991. "Public Goods in Trade: On the Formation of Markets and Political Jurisdictions," CEPR Discussion Papers 511, C.E.P.R. Discussion Papers.
  7. Brown, Charles C. & Oates, Wallace E., 1987. "Assistance to the poor in a federal system," Journal of Public Economics, Elsevier, vol. 32(3), pages 307-330, April.
  8. Casella, Alessandra, 1992. "On Markets and Clubs: Economic and Political Integration of Regions with Unequal Productivity," American Economic Review, American Economic Association, vol. 82(2), pages 115-21, May.
  9. Alesina, Alberto & Perotti, Roberto, 1994. "Economic Risk and Political Risk in Fiscal Unions," Scholarly Articles 4553022, Harvard University Department of Economics.
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