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Are equalization payments making Canadians better off? A two-dimensional dominance answer

Author

Listed:
  • Benoît Tarroux

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article provides a robust normative appraisal of the Canadian equalization transfers system. The two-dimensional dominance criteria introduced by Atkinson and Bourguignon (RES, 1982) are used to compare the distributions of private and public goods before and after equalization payments. Because the distribution before equalization is not observable, it is simulated on the basis of various scenarios that specify both its financing by the federal government and its utilization by provincial governments. The main result of the paper is that, for most scenarios, equalization transfers have an ambiguous normative impact on the distribution of well-being among Canadians and that, for some scenarios, equalization transfers actually worsen this distribution of well-being.

Suggested Citation

  • Benoît Tarroux, 2012. "Are equalization payments making Canadians better off? A two-dimensional dominance answer," Post-Print halshs-00560053, HAL.
    • Handle: RePEc:hal:journl:halshs-00560053
    DOI: 10.1007/s10888-010-9152-1
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    Cited by:

    1. Rongili Biswas & Nicolas Gravel & Rémy Oddou, 2013. "The segregative properties of endogenous formation of jurisdictions with a welfarist central government," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(2), pages 293-319, July.

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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H4 - Public Economics - - Publicly Provided Goods
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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