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Redistribution within and across the Regions of a Federation

Author

Listed:
  • John B. Burbidge
  • Gordon M. Myers

Abstract

The authors reconsider the literature on redistribution within a federation with mobile agents. They conclude that redistribution is a function best assigned to the national government; local governments with diverse preferences for redistribution distort individual migration decisions. The authors also examine the fiscal externality literature, which has made an efficiency argument for interregional transfers. They show that, if local governments have the same preferences for redistribution, the Nash equilibrium is efficient. If preferences are diverse, the authors show that nationally imposed interregional transfers do not address the source of the inefficiency. Nevertheless, interregional transfers are shown to be a part of decentralized behavior.

Suggested Citation

  • John B. Burbidge & Gordon M. Myers, 1994. "Redistribution within and across the Regions of a Federation," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 620-636, August.
    • Handle: RePEc:cje:issued:v:27:y:1994:i:3:p:620-36
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    Citations

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    Cited by:

    1. Andreas Pfingsten & Andreas Wagener, 1997. "Centralized vs. Decentralized Redistribution: A Case for Interregional Transfer Mechanisms," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(4), pages 429-451, November.
    2. Casella, Alessandra, 2005. "Redistribution policy: A European model," Journal of Public Economics, Elsevier, vol. 89(7), pages 1305-1331, July.
    3. Silva, Emilson C. D., 1997. "Decentralized and Efficient Control of Transboundary Pollution in Federal Systems," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 95-108, January.
    4. Berliant, Marcus & Rothstein, Paul, 2000. "On Models with an Uncongestible Public Good and a Continuum of Consumers," Journal of Urban Economics, Elsevier, vol. 48(3), pages 388-396, November.
    5. Bagchi, Amaresh & Chakraborty, Pinaki, 2004. "Towards a rational system of centre-state revenue transfers in India: An exploration," Working Papers 04/16, National Institute of Public Finance and Policy.
    6. Wellisch, Dietmar & Walz, Uwe, 1998. "Why do rich countries prefer free trade over free migration? The role of the modern welfare state," European Economic Review, Elsevier, vol. 42(8), pages 1595-1612, September.
    7. Huizinga, Harry, 1999. "A two-region model of redistribution, migration and international trade," Journal of Public Economics, Elsevier, vol. 71(3), pages 335-354, March.
    8. Janet Rothenberg Pack, 1998. "Poverty and Urban Public Expenditures," Urban Studies, Urban Studies Journal Limited, vol. 35(11), pages 1995-2019, November.
    9. Parviainen, Seija, 1998. "Redistribution and Risk Sharing in EMU," Discussion Papers 159, VATT Institute for Economic Research.
    10. Kjetil Bjorvatn, 1998. "Taxation and Migration in a Federal System," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 345-355, July.
    11. Arman Mansoorian, 2000. "Risk sharing in a federation with population mobility and long horizons," Canadian Journal of Economics, Canadian Economics Association, vol. 33(3), pages 662-676, August.
    12. Robin Boadway & Katherine Cuff & Maurice Marchand, 2003. "Equalization and the Decentralization of Revenue–Raising in a Federation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 201-228, April.
    13. Wagener, Andreas, 2000. "Variable population size issues in models of decentralized income redistribution," Regional Science and Urban Economics, Elsevier, vol. 30(6), pages 609-625, December.
    14. Petchey, Jeffery & Shapiro, Perry, 2003. "Policy Competition, Factor Mobility and Multiple Policy Instruments: Existence and Non-Existence of Equilibrium," University of California at Santa Barbara, Economics Working Paper Series qt5421r6cc, Department of Economics, UC Santa Barbara.
    15. Joan Rosselló, 2003. "Regional redistribution and growth," Investigaciones Economicas, Fundación SEPI, vol. 27(2), pages 369-392, May.
    16. Myers, Gordon M. & Papageorgiou, Yorgos Y., 1997. "Efficient Nash equilibria in a federal economy with migration costs," Regional Science and Urban Economics, Elsevier, vol. 27(4-5), pages 345-371, August.
    17. Feld, Lars P, 2000. "Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland," Public Choice, Springer, vol. 105(1-2), pages 125-164, October.
    18. Thomas Aronsson & Sören Blomquist & Luca Micheletto, 2010. "Where Should the Elderly Live and Who Should Pay for Their Care?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(2), pages 289-314, June.
    19. Arman Mansoorian, 1996. "Risk Sharing and Redistribution in a Federal System with Population Mobility," Working Papers 1996_03, York University, Department of Economics.
    20. Robin Boadway & Katherine Cuff, 2017. "The impressive contribution of Canadian economists to fiscal federalism theory and policy," Canadian Journal of Economics, Canadian Economics Association, vol. 50(5), pages 1348-1380, December.
    21. repec:ind:nipfwp:16 is not listed on IDEAS
    22. Uwe Walz & Dietmar Wellisch, 1999. "The Welfare State, an Impediment to Integration?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 56(2), pages 218-218, June.
    23. Motohiro Sato, 2000. "Fiscal Externalities and Efficient Transfers in a Federation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(2), pages 119-139, March.
    24. Gordon M. Myers & Yorgos Y. Papageorgiou, 2002. "Towards a Better System for Immigration Control," Journal of Regional Science, Wiley Blackwell, vol. 42(1), pages 51-74, February.
    25. Jeffrey Petchey, 1995. "Resource Rents, Cost Differences and Fiscal Equalization," The Economic Record, The Economic Society of Australia, vol. 71(4), pages 343-353, December.

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