Regional income disparity and the size of the Public Sector
AbstractThis paper focuses on the question of how income inequality between two jurisdictions impacts upon government decision-making affecting the size of the public sector. We model policy choices as the outcome of regional representatives'negotiations in the legislature. We show that the more unequal inter-regional income distribution is, the greater the under-provision of public goods. Particularly, larger inter-regional income disparity leads to a smaller public sector. A wealthier economy as a result may have a relatively smaller government size when income disparity increases.
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Bibliographic InfoPaper provided by Institute of Public Policy and Public Choice - POLIS in its series POLIS Working Papers with number 114.
Length: 26 pages
Date of creation: Nov 2008
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Web page: http://polis.unipmn.it
Other versions of this item:
- Michele Giuseppe Giuranno, 2009. "Regional Income Disparity and the Size of the Public Sector," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(5), pages 697-719, October.
- NEP-ALL-2008-11-25 (All new papers)
- NEP-GEO-2008-11-25 (Economic Geography)
- NEP-PBE-2008-11-25 (Public Economics)
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