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Decentralized Redistribution in a Laboratory Federation

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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 imitation-with-experimentation will lead to a complete breakdown of the welfare state: zero transfers.

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  • Ana B. Ania & Andreas Wagener, 2014. "Decentralized Redistribution in a Laboratory Federation," Vienna Economics Papers vie1402, University of Vienna, Department of Economics.
    • Handle: RePEc:vie:viennp:vie1402
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    Cited by:

    1. Floriana Cerniglia; Riccarda Longaretti; Alberto Zanardi, 2020. "The Emergence of Asymmetric Decentralization: Centrifugal and Centripetal Forces," CRANEC - Working Papers del Centro di Ricerche in Analisi economica e sviluppo economico internazionale crn2001, Università Cattolica del Sacro Cuore, Centro di Ricerche in Analisi economica e sviluppo economico internazionale (CRANEC).
    2. Ana B. Ania & Andreas Wagener, 2021. "Laboratory federalism with public funds sharing," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1047-1065, July.
    3. Ana B. Ania & Andreas Wagener, 2021. "Laboratory federalism with public funds sharing," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1047-1065, July.

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    More about this item

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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