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Decentrqalized Redistribution in a Laboratory Federation

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  • Ana B. Ania

    ()

  • Andreas Wagener

    ()

Abstract

Fiscal federalism is often hailed as an innovation procedure: successful policy experiments in one jurisdiction will, via imitation, spread through the entire system, leading to overall better policy performance. We show that such hopes set in laboratory federalism may be ill-founded. For a standard framework of decentralized redistribution in a common labor market with mobile transfer recipients imitationwith- experimentation will lead to a complete breakdown of the welfare state: zero transfers.

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File URL: http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie1402.pdf
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Bibliographic Info

Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 1402.

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Date of creation: Feb 2014
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Handle: RePEc:vie:viennp:1402

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Web page: http://www.univie.ac.at/vwl

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  6. Ana B. Ania & Andreas Wagener, 2009. "The Open Method of Coordination (OMC) as an Evolutionary Learning Process," CESifo Working Paper Series 2601, CESifo Group Munich.
  7. SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des Mathématiques Economiques – Document de travail de l’I.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
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  12. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-56, August.
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