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Dynamic Horizontal and Vertical Equity in Intergovernmental Transfers

Author

Listed:
  • Antonio Zabalza

    () (University of Valencia, Spain)

Abstract

This paper shows that actual systems of intergovernmental transfers are incompletely specified when viewed as mechanisms that operate over time, and that the norms of evolution most frequently used do not preserve the distributive properties they have at their initial position. We argue that this problem is solved if these systems are completed with a dynamic condition of vertical equity based on the same economic premises that underlie their static specification. This gives rise to a new norm of evolution that over time preserves both Horizontal Equity and Vertical Equity: the HEAVE norm.

Suggested Citation

  • Antonio Zabalza, 2008. "Dynamic Horizontal and Vertical Equity in Intergovernmental Transfers," Working Papers 0801, International Economics Institute, University of Valencia.
  • Handle: RePEc:iei:wpaper:0801
    as

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    File URL: http://iei.uv.es/docs/wp_internos/RePEc/pdf/iei_0801.pdf
    File Function: First version, 2008
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    References listed on IDEAS

    as
    1. Robin Boadway, 2004. "Should the Canadian Federation be Rebalanced?," University of Western Ontario, Economic Policy Research Institute Working Papers 20041, University of Western Ontario, Economic Policy Research Institute.
    2. Angel de la Fuente & MarÌa GundÌn, "undated". "El sistema de financiaciÛn de las comunidades autÛnomas de rÈgimen com˙n: un an·lisis crÌtico y algunas propuestas de reforma," Studies on the Spanish Economy 236, FEDEA.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Intergovernmental transfers; dynamic horizontal and vertical equity;

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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