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"Reverse" Intergovernmental Transfers Between Regions with Local Public Goods

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Author Info
John M. Hartwick () (Queen`s University)

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Abstract

We 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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File URL: http://www.econ.queensu.ca/working_papers/papers/qed_wp_1221.pdf
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File Function: First version 2009
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Publisher Info
Paper provided by Queen's University, Department of Economics in its series Working Papers with number 1221.

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Length: 17 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:qed:wpaper:1221

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Related research
Keywords: intergovernmental transfers; local public goods; inter-regional resource allocation;

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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, and Regional Economics - - Household Analysis - - - Government Policy

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  1. Ciccone, Antonio & Hall, Robert E, 1996. "Productivity and the Density of Economic Activity," American Economic Review, American Economic Association, vol. 86(1), pages 54-70, March. [Downloadable!] (restricted)
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  2. John M. Hartwick, 1980. "The Henry George Rule, Optimal Population, and Interregional Equity," Canadian Journal of Economics, Canadian Economics Association, vol. 13(4), pages 695-700, November. [Downloadable!] (restricted)
  3. Mansoorian, Arman & Myers, Gordon M., 1997. "On the consequences of government objectives for economies with mobile populations," Journal of Public Economics, Elsevier, vol. 63(2), pages 265-281, January. [Downloadable!] (restricted)
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  4. Mansoorian, Arman & Myers, Gordon M., 1993. "Attachment to home and efficient purchases of population in a fiscal externality economy," Journal of Public Economics, Elsevier, vol. 52(1), pages 117-132, August. [Downloadable!] (restricted)
  5. Flatters, Frank & Henderson, Vernon & Mieszkowski, Peter, 1974. "Public goods, efficiency, and regional fiscal equalization," Journal of Public Economics, Elsevier, vol. 3(2), pages 99-112, May. [Downloadable!] (restricted)
  6. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-42, April. [Downloadable!] (restricted)
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This page was last updated on 2009-12-11.

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