"Reverse" Intergovernmental Transfers Between Regions with Local Public Goods
AbstractWe report on the nature of a utility optimizing transfer from one regional government to another when local public goods are present. Computer examples reveal that small differences in regional endowments result in large differences in equilibrium outcomes for two regions, under optimal transfers. The scale effect (lower tax charge per person for the same public good in more populous regions) leads to the small region generally providing transfers to the larger region.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 1221.
Length: 17 pages
Date of creation: Nov 2009
Date of revision:
intergovernmental transfers; local public goods; inter-regional resource allocation;
Find related papers by JEL classification:
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- R28 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-14 (All new papers)
- NEP-GEO-2009-11-14 (Economic Geography)
- NEP-PBE-2009-11-14 (Public Economics)
- NEP-PUB-2009-11-14 (Public Finance)
- NEP-URE-2009-11-14 (Urban & Real Estate Economics)
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