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Determining General and Specific Purpose Transfers : An Integrated Approach

Author

Listed:
  • Richa Saraf

    (MSE)

  • D.K.Srivastava

Abstract

This study attempts to provide an alternative methodology to calculate the horizontal equalization transfers. This methodology follows the Australian horizontal equalization principle using a panel model methodology where both revenue and expenditure side considerations are involved. First, it applies the Canadian model in calculating the fiscal capacity equalization. Then the expenditure side equalization has been carried out for two services - education and health. Results of the exercise indicate that the transfers suggested by the panel model are more progressive than the TFC recommended transfers.

Suggested Citation

  • Richa Saraf & D.K.Srivastava, 2009. "Determining General and Specific Purpose Transfers : An Integrated Approach," Microeconomics Working Papers 22943, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:microe:22943
    as

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    File URL: http://www.eaber.org/node/22943
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    References listed on IDEAS

    as
    1. Robin W. Boadway & Frank R. Flatters, 1982. "Efficiency and Equalization Payments in a Federal System of Government: A Synthesis and Extension of Recent Results," Canadian Journal of Economics, Canadian Economics Association, vol. 15(4), pages 613-633, November.
    2. James M. Buchanan & Richard E. Wagner, 1970. "An Efficiency Basis for Federal Fiscal Equalization," NBER Chapters,in: The Analysis of Public Output, pages 139-162 National Bureau of Economic Research, Inc.
    3. Rangarajan, C. & Srivastava, D.K., 2004. "Fiscal transfer in Canada: Drawing comparisons and lessons," Working Papers 04/18, National Institute of Public Finance and Policy.
    4. Ross Garnaut, 2002. "Equity and Australian Development: Lessons from the First Century," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 227-243.
    5. Rangarajan, C. & Srivastava, D.K., 2004. "Fiscal transfer in Australia: Review and relevance to India," Working Papers 04/20, National Institute of Public Finance and Policy.
    6. Ross Garnaut & Vince FitzGerald, 2002. "Issues in Commonwealth-State Funding," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 290-300.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    horizontal equalization transfers; education; health; fiscal capacity equalization;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D30 - Microeconomics - - Distribution - - - General

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