IDEAS home Printed from https://ideas.repec.org/p/hrv/faseco/4553022.html
   My bibliography  Save this paper

Economic Risk and Political Risk in Fiscal Unions

Author

Listed:
  • Alesina, Alberto
  • Perotti, Roberto

Abstract

A fiscal programme that redistributes income from rich to poor individuals indirectly redistributes tax revenues from regions hit by a favourable shock to regions hit by an unfavourable one. Centralised fiscal redistribution has therefore been advocated as a way to insure individuals against region-specific shocks. In this paper, we argue that a centralised fiscal policy, while reducing the uncertainty on the tax base, may create additional uncertainty on the tax rate. Using a simple model we show that the higher uncertainty on the policy instrument might more than offset the lower uncertainty on the tax base.

Suggested Citation

  • Alesina, Alberto & Perotti, Roberto, 1994. "Economic Risk and Political Risk in Fiscal Unions," Scholarly Articles 4553022, Harvard University Department of Economics.
  • Handle: RePEc:hrv:faseco:4553022
    as

    Download full text from publisher

    File URL: http://dash.harvard.edu/bitstream/handle/1/4553022/alesina_risk.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alesina, Alberto & Perotti, Roberto & Spolaore, Enrico, 1995. "Togetheror separately? Issues on the costs and benefits of political and fiscal unions," European Economic Review, Elsevier, vol. 39(3-4), pages 751-758, April.
    2. Ridha Chkoundali & Houda Haffoudhi & Houda Abdenneji, 2011. "Institutional Sphere Contribution to Human Development: An Institutional Approach," Working Papers 629, Economic Research Forum, revised 09 Jan 2011.
    3. Conde-Ruiz, J. Ignacio & Celentani, Marco, 1996. "The political economy of international private insurance and fiscal policy," UC3M Working papers. Economics 6164, Universidad Carlos III de Madrid. Departamento de Economía.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hrv:faseco:4553022. 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: (Office for Scholarly Communication). General contact details of provider: http://edirc.repec.org/data/deharus.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.