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Dynamic Horizontal and Vertical Equity in Intergovernmental Transfers

  • Antonio Zabalza

    ()

    (University of Valencia, Spain)

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.

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File URL: http://iei.uv.es/docs/wp_internos/RePEc/pdf/iei_0801.pdf
File Function: First version, 2008
Download Restriction: no

Paper provided by International Economics Institute, University of Valencia in its series Working Papers with number 0801.

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Length: 29 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:iei:wpaper:0801
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Web page: http://iei.uv.es
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  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 & María Gundín, . "El sistema de financiación de las comunidades autónomas de régimen común: un análisis crítico y algunas propuestas de reforma," Studies on the Spanish Economy 236, FEDEA.
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