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On the Size and Determinants of Inter-regional Redistribution in European Countries over the Period 1995-2009

  • Lago-Peñas, Santiago
  • Prada, Albino
  • Vaquero, Alberto

The aim of this paper is to analyse cross-country differences in the degree of inter-regional redistribution achieved by means of taxes and expenditures in 21 European countries over the period 1995-2009. We rely on a standard approach based on the observation and comparison of both primary and disposable household income at regional scale. Once the redistributive effect in each country is quantified, we try to explain the drivers of cross-country time-series differences. According to our estimates, cross-national standard deviation is significant and much higher than time variation. Secondly, inter-regional redistribution is strongly and positively related to personal redistribution by means of taxes and social benefits in cash; and is negatively related to both the extent of regional disparities in primary income and to the degree of political and fiscal decentralization.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 45406.

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Date of creation: 10 Mar 2013
Date of revision:
Handle: RePEc:pra:mprapa:45406
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  1. Janet Currie & Firouz Gahvari, 2007. "Transfers in Cash and In Kind: Theory Meets the Data," NBER Working Papers 13557, National Bureau of Economic Research, Inc.
  2. repec:oup:qjecon:v:111:y:1996:i:4:p:1081-1110 is not listed on IDEAS
  3. Decressin, Jorg, 2002. "Regional income redistribution and risk sharing: how does Italy compare in Europe?," Journal of Public Economics, Elsevier, vol. 86(2), pages 287-306, November.
  4. Boadway, Robin & Marchand, Maurice, 1995. "The Use of Public Expenditures for Redistributive Purposes," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 45-59, January.
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  6. Melitz, Jacques & Zumer, Frederic, 2002. "Regional redistribution and stabilization by the center in Canada, France, the UK and the US:: A reassessment and new tests," Journal of Public Economics, Elsevier, vol. 86(2), pages 263-286, November.
  7. Ralf Hepp & Jürgen von Hagen, 2012. "Fiscal Federalism in Germany: Stabilization and Redistribution Before and After Unification," Publius: The Journal of Federalism, Oxford University Press, vol. 42(2), pages 234-259, April.
  8. Luiz de Mello & Erwin R. Tiongson, 2006. "Income Inequality and Redistributive Government Spending," Public Finance Review, , vol. 34(3), pages 282-305, May.
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  10. Bruno Bises & Agnese Sacchi, 2011. "On Cash Transfers, In-Kind Provision, and the Size of Local Jurisdictions," Public Finance Review, , vol. 39(4), pages 527-550, July.
  11. Santiago Lago Peñas, 2001. "Redistribución y Estabilización Macroeconómica en las Regiones Españolas: 1967-1993," Hacienda Pública Española, IEF, vol. 158(3), September.
  12. Bayoumi, Tamim & Masson, Paul R., 1995. "Fiscal flows in the United States and Canada: Lessons for monetary union in Europe," European Economic Review, Elsevier, vol. 39(2), pages 253-274, February.
  13. Agnese Sacchi & Simone Salotti, 2014. "The Effects of Fiscal Decentralization on Household Income Inequality: Some Empirical Evidence," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(2), pages 202-222, June.
  14. Núria Bosch & Marta Espasa & Pilar Sorribas, 2002. "La capacidad redistributiva y estabilizadora del presupuesto del Gobierno Central Español," Working Papers 2002/1, Institut d'Economia de Barcelona (IEB).
  15. Maria Flavia Ambrosanio & Massimo Bordignon & Floriana Cerniglia, 2008. "Constitutional reforms, fiscal decentralization and regional fiscal flows in Italy," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0084, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  16. Erik Wibbels, 2005. "Decentralized Governance, Constitution Formation, and Redistribution," Constitutional Political Economy, Springer, vol. 16(2), pages 161-188, 06.
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