Income Redistribution in an Economic Union: The Trade Off Between Inter- and Intra-National Redistribution
This paper studies the design of redistributive policiesbetween and within the member countries of an economic union.There are two types of countries, which differ in their proportionof high income individuals. Both the supra-national and the nationalgovernments attempt to redistribute income within their respectiveboundaries. However, the central government cannot observe anindividual country‘s ability to pay; it only observes the aggregate(internal) redistributive effort of each country. We derive theoptimal incentive compatible tax-transfer policy of the centralgovernment and show that there is a tradeoff between inter- andintra-national redistribution. Specifically, to reduce informationalrents of the rich countries, the optimal policy induces a distortionin the poor countries‘ (internal) redistributive policies. Interestingly,both insufficient as well as excessive redistribution can arise. Copyright Kluwer Academic Publishers 1997
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cremer, H. & Marchand, M. & Pestieau, P., .
"Interregional redistribution through tax surcharge,"
CORE Discussion Papers RP
1218, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Helmuth Cremer & Maurice Marchand & Pierre Pestieau, 1996. "Interregional redistribution through tax surcharge," International Tax and Public Finance, Springer, vol. 3(2), pages 157-173, May.
- Stiglitz, Joseph E., 1982.
"Self-selection and Pareto efficient taxation,"
Journal of Public Economics,
Elsevier, vol. 17(2), pages 213-240, March.
- Massimo Bordignon & Paolo Manasse & Guido Tabellini, 2001.
"Optimal Regional Redistribution under Asymmetric Information,"
American Economic Review,
American Economic Association, vol. 91(3), pages 709-723, June.
- Massimo Bordignon & Paolo Manasse & Guido Tabellini, . "Optimal Regional Redistribution Under Asymmetric Information," Working Papers 93, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Bordignon, Massimo & Manasse, Paolo & Tabellini, Guido, 1996. "Optimal Regional Redistribution Under Asymmetric Information," CEPR Discussion Papers 1437, C.E.P.R. Discussion Papers.
- BUCOVETSKY, Sam & MARCHAND, Maurice & PESTIEAU, Pierre, 1997.
"Tax competition and revelation of preferences for public expenditure,"
CORE Discussion Papers
1997003, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Bucovetsky, S. & Marchand, M. & Pestieau, P., 1998. "Tax Competition and Revelation of Preferences for Public Expenditure," Journal of Urban Economics, Elsevier, vol. 44(3), pages 367-390, November.
- BUCOVETSKY, Sam & MARCHAND, Maurice & PESTIEAU, Pierre, . "Tax competition and revelation of preferences for public expenditure," CORE Discussion Papers RP 1352, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Picard, P. & Gilbert, G., 1992.
"Incentives and the Optimal Size of Local Territories,"
Research Papers by the Institute of Economics and Econometrics, Geneva School of Economics and Management, University of Geneva
92.12, Institut d'Economie et Econométrie, Université de Genève.
- Picard Pierre & Gilbert G, 1991. "Incentives and the optimal size of local territories," CEPREMAP Working Papers (Couverture Orange) 9124, CEPREMAP.
- Horst Raff & John Wilson, 1997. "Income Redistribution with Well-Informed Local Governments," International Tax and Public Finance, Springer, vol. 4(4), pages 407-427, November.
- Cremer, Helmuth & Pestieau, Pierre, 1996.
"Distributive implications of European integration,"
European Economic Review,
Elsevier, vol. 40(3-5), pages 747-757, April.
When requesting a correction, please mention this item's handle: RePEc:kap:itaxpf:v:4:y:1997:i:3:p:325-335. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.