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Federal Fiscal Constitutions. Part II: Risk Sharing and Redistribution


  • Persson, Torsten
  • Tabellini, Guido


The paper studies the political and economic determinants of inter-regional public transfers. It points to an important difference between two alternative federal fiscal constitutions. The paper shows that inter-regional transfers can be determined either by a federation-wide vote over a centralized social insurance system, or by bargaining over intergovernmental transfers. When regions are asymmetric, the federal social insurance system leads to a larger fiscal programme.

Suggested Citation

  • Persson, Torsten & Tabellini, Guido, 1995. "Federal Fiscal Constitutions. Part II: Risk Sharing and Redistribution," CEPR Discussion Papers 1142, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:1142

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    References listed on IDEAS

    1. Deardorff, Alan V, 1992. "Welfare Effects of Global Patent Protection," Economica, London School of Economics and Political Science, vol. 59(233), pages 35-51, February.
    2. Ciccone, Antonio & Matsuyama, Kiminori, 1996. "Start-up costs and pecuniary externalities as barriers to economic development," Journal of Development Economics, Elsevier, vol. 49(1), pages 33-59, April.
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    5. Dixit, Avinash K & Stiglitz, Joseph E, 1993. "Monopolistic Competition and Optimum Product Diversity: Reply," American Economic Review, American Economic Association, vol. 83(1), pages 302-304, March.
    6. Dinopoulos, Elias & Oehmke, James F. & Segerstrom, Paul S., 1993. "High-technology-industry trade and investment : The role of factor endowments," Journal of International Economics, Elsevier, vol. 34(1-2), pages 49-71, February.
    7. Brezis, Elise S & Krugman, Paul R & Tsiddon, Daniel, 1993. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership," American Economic Review, American Economic Association, vol. 83(5), pages 1211-1219, December.
    8. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
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    More about this item


    Fiscal Federalism; Redistribution; Voting;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General


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