IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Income redistribution in an economic union : the trade off between inter- and intranational redistribution

  • CREMER, Helmuth

    (GREMAQ and IDEI, Université de Toulouse)

  • PESTIEAU, Pierre

    ()

    (CREPP, Université de Liège and Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

This paper studies the design of redistributive policies between and within the member countries of an economic union. There are two types of countries, which differ in their proportion of high income individuals. Both the supra-national and the national governments attempt to redistribute income within their respective boundaries. However, the central government cannot observe an individual country's ability to pay; it only observes the aggregate (internal) redistributive effort of each country. We derive the optimal incentive compatible tax-transfer policy of the central government and show that there is a tradeoff between inter- and intranational redistribution. Specifically, to reduce informational rents of the rich countries, the optimal policy induces a distortion in the poor countries'(internal) redistributive policies. Interestingly, both insufficient as well as excessive redistribution can arise.

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.

File URL: http://alfresco.uclouvain.be/alfresco/download/attach/workspace/SpacesStore/6376bf27-4a68-4073-a6e0-785e7b3c7852/coredp_1996_53.pdf
Download Restriction: no

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1996053.

as
in new window

Length:
Date of creation: 01 Oct 1996
Date of revision:
Handle: RePEc:cor:louvco:1996053
Contact details of provider: Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)
Phone: 32(10)474321
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
Email:


More information through EDIRC

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.:

as in new window
  1. CREMER, Helmuth & MARCHAND, Maurice & PESTIEAU, Pierre, 1994. "Interregional Reditribution through Tax Surcharge," CORE Discussion Papers 1994069, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. 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.
  3. 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.
  4. Cremer, H. & Pestieau, P., . "Distributive implications of European integration," CORE Discussion Papers RP -1237, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Stiglitz, Joseph E., 1982. "Self-selection and Pareto efficient taxation," Journal of Public Economics, Elsevier, vol. 17(2), pages 213-240, March.
  6. 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.
  7. 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.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:cor:louvco:1996053. 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: (Alain GILLIS)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.