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Semi-voluntary Horizontal Equalization

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  • M.G. Giuranno
  • L. Greco

Abstract

In this model of fiscal federalism, the case of jurisdictions that,although differing in their fiscal capacities, negotiate their level of inter-jurisdictional transfers is studied. The article shows how the chosen negotiating rule redistributes, in effect, the power of veto between jurisdictions, thus influencing the level of equalization between territories. Therefore, the difficulties faced by the legislator in the implementation of horizontal equalization mechanisms, provided by some laws, depend on an unbalanced determination of the power of veto typically in favour of territories with above-average tax capacity. That is a problem to be considered in the design of horizontal equalization mechanisms.

Suggested Citation

  • M.G. Giuranno & L. Greco, 2017. "Semi-voluntary Horizontal Equalization," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 927-938.
    • Handle: RePEc:mul:jqyfkm:doi:10.1432/90201:y:2017:i:4:p:927-938
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    References listed on IDEAS

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    1. Robin Boadway, 2004. "The Theory and Practice of Equalization," CESifo Economic Studies, CESifo Group, vol. 50(1), pages 211-254.
    2. Adriano Giannola & Carmelo Petraglia & Domenico Scalera, 2017. "Residui fiscali, bilancio pubblico e politiche regionali," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(2), pages 33-57.
    3. Carmela Brugnano & Giuseppe Ferraina & Andrea Ferri & Larissa Minzuk & Felice Russo, 2017. "Federalismo municipale e nuovo sistema perequativo: il Fondo di solidarietà comunale 2016," Working papers 58, Società Italiana di Economia Pubblica.
    4. Kotsogiannis, Christos & Schwager, Robert, 2008. "Accountability and fiscal equalization," Journal of Public Economics, Elsevier, vol. 92(12), pages 2336-2349, December.
    5. Carmela Brugnano & Giuseppe Ferraina & Andrea Ferri & Larysa Minzyuk & Felice Russo, 2017. "Federalismo municipale e nuovo sistema perequativo: il Fondo di solidariet? comunale 2016," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2017(2), pages 93-133.
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