Centralized Fiscal Spending by Supranational Unions
We study fiscal spending by supranational unions, where participation is voluntary and countries bargain over contributions to and the allocation of a central budget. We explore the link between the allocation and nationsâ€™ contributions that occurs since bargaining power is endogenous, and generically causes inefficiency. Interestingly, redistribution arises endogenously, despite nations being purely self-interested. However, there exists a trade-off between increasing equality and decreasing efficiency, which becomes more severe as the centralized budget increases. We also analyze partial ex-ante commitment through alternative decision-making institutions: Both majority rule and exogenous tax rules can improve efficiency.
|Date of creation:||2013|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo-group.de
More information through EDIRC
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.:
- Ben Lockwood, 2002.
"Distributive Politics and the Costs of Centralization,"
Review of Economic Studies,
Oxford University Press, vol. 69(2), pages 313-337.
- Lockwood, Ben, 1998. "Distributive Politics and the Costs of Centralization," CEPR Discussion Papers 2046, C.E.P.R. Discussion Papers.
- Alberto Alesina & Ignazio Angeloni & Federico Etro, 2005. "International Unions," American Economic Review, American Economic Association, vol. 95(3), pages 602-615, June.
- Alesina, Alberto F & Angeloni, Ignazio & Etro, Federico, 2003. "International Unions," CEPR Discussion Papers 3913, C.E.P.R. Discussion Papers.
- Alberto Alesina & Ignazio Angeloni & Federico Etro, 2003. "International Unions," Harvard Institute of Economic Research Working Papers 2001, Harvard - Institute of Economic Research.
- Etro, Federico & Ageloni, Ignazio & Alesina, Alberto, 2005. "International Unions," Scholarly Articles 4553008, Harvard University Department of Economics.
- Herrero, Maria Jose, 1989. "The nash program: Non-convex bargaining problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 266-277, December.
- Salvador Barbera & Matthew O. Jackson, 2006. "On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union," Journal of Political Economy, University of Chicago Press, vol. 114(2), pages 317-339, April.
- Salvador Barberà & Matthew O. Jackson, 2003. "On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union," Working Papers 220, Barcelona Graduate School of Economics.
- Salvador Barbera & Matthew O. Jackson, 2004. "On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union," Working Papers 2004.76, Fondazione Eni Enrico Mattei.
- Barbera, Salvador & Matthew O. Jackson, 2004. "On the Weights of Nations: Assigning Voting Weights in a Heterogeneous Union," Working Papers 1196, California Institute of Technology, Division of the Humanities and Social Sciences.
- Salvador BARBER?Author-Email: firstname.lastname@example.org & Matthew O. JACKSON, 2003. "On the Weights of Nations: Assigning Voting Weights in a Heterogenous Union," UFAE and IAE Working Papers 597.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Giovanni Maggi & Massimo Morelli, 2006. "Self-Enforcing Voting in International Organizations," American Economic Review, American Economic Association, vol. 96(4), pages 1137-1158, September.
- Giovanni Maggi & Massimo Morelli, 2003. "Self Enforcing Voting in International Organizations," NBER Working Papers 10102, National Bureau of Economic Research, Inc.
- Lin Zhou, 1997. "The Nash Bargaining Theory with Non-Convex Problems," Econometrica, Econometric Society, vol. 65(3), pages 681-686, May.
- Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, vol. 18(2), pages 155-162, April.
- Philippe Aghion & Patrick Bolton, 2003. "Incomplete Social Contracts," Journal of the European Economic Association, MIT Press, vol. 1(1), pages 38-67, March.
- Aghion, Philippe & Bolton, Patrick, 2003. "Incomplete Social Contracts," Scholarly Articles 4554123, Harvard University Department of Economics.
- Conley, John P. & Wilkie, Simon, 1996. "An Extension of the Nash Bargaining Solution to Nonconvex Problems," Games and Economic Behavior, Elsevier, vol. 13(1), pages 26-38, March.
- Bodenstein, Thilo and Achim Kemmerling, 2012. "Ripples in a rising tide: Why some EU regions receive more structural funds than others," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 16, January.
- Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
- Bård Harstad, 2007. "Harmonization and Side Payments in Political Cooperation," American Economic Review, American Economic Association, vol. 97(3), pages 871-889, June.
- Lisa Maria Dellmuth & Michael F Stoffel, 2012. "Distributive politics and intergovernmental transfers: The local allocation of European Union structural funds," European Union Politics, , vol. 13(3), pages 413-433, September. Full references (including those not matched with items on IDEAS)