A Median Voter Model of the Vertical Fiscal Gap
A median voter model is developed to explain the size of the vertical fiscal gap in a federation, i.e. the extent to which subnational governments' expenditures exceed their own-source tax revenues. In our model, individuals vote in subnational elections and in federal elections to determine tax rates and spending on public services by each level of government and transfers to the subnational governments. In the resulting political equilibrium, intergovernmental transfers from the central government are affected by the tax sensitivity of the tax bases of the central and subnational governments, the degree of inequality in the tax bases of the subnational governments, the allocation of spending responsibilities between the central and subnational governments, and whether the federal legislature is unicameral or bicameral.
|Date of creation:||Jan 2009|
|Contact details of provider:|| Postal: 8-14 HM Tory, Edmonton, Alberta, T6G 2H4|
Phone: (780) 492-3406
Fax: (780) 492-3300
Web page: http://www.ualberta.ca/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alberto Porto & Pablo Sanguinetti, 2001. "Political Determinants of Intergovernmental Grants: Evidence From Argentina," Economics and Politics, Wiley Blackwell, vol. 13(3), pages 237-256, November.
- Usher, Dan, 1977.
"The welfare economics of the socialization of commodities,"
Journal of Public Economics,
Elsevier, vol. 8(2), pages 151-168, October.
- Dan Usher, 1976. "The Welfare Economics of the Socialization of Commodities," Working Papers 218, Queen's University, Department of Economics.
- Pereira, Paulo T C, 1996. "A Politico-economic Approach to Intergovernmental Lump-Sum Grants," Public Choice, Springer, vol. 88(1-2), pages 185-201, July.
- Becker, Gary S & Mulligan, Casey B, 2003. "Deadweight Costs and the Size of Government," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 293-340, October.
- Gary S. Becker & Casey B. Mulligan, 1998. "Deadweight Costs and the Size of Government," University of Chicago - George G. Stigler Center for Study of Economy and State 144, Chicago - Center for Study of Economy and State.
- Gary S. Becker & Casey B. Mulligan, 1998. "Deadweight Costs and the Size of Government," NBER Working Papers 6789, National Bureau of Economic Research, Inc.
- Borck, Rainald & Owings, Stephanie, 2003. "The political economy of intergovernmental grants," Regional Science and Urban Economics, Elsevier, vol. 33(2), pages 139-156, March.
- Roemer, John E & Silvestre, Joaquim, 2002. " The "Flypaper Effect" Is Not an Anomaly," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(1), pages 1-17.
- John E. Roemer & Joaquim Silvestre, "undated". "The ‘Flypaper Effect’ Is Not An Anomaly," Department of Economics 00-04, California Davis - Department of Economics.
- John Roemer & Selva Demiralp & Holly Liu & Jeffrey Williams, 2003. "The 'Flypaper Effect' is not an anomaly," Working Papers 04, University of California, Davis, Department of Economics.
- Mel Bungey & Peter Kenyon & Philip J. Grossman, 1991. "Explaining intergovernmental grants: Australian evidence," Monash Economics Working Papers archive-14, Monash University, Department of Economics.
- Richard M Bird & Andrey V Tarasov, 2004. "Closing the gap: fiscal imbalances and intergovernmental transfers in developed federations," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 22(1), pages 77-102, February.
- Richard M Bird & Andrey V Tarasov, 2004. "Closing the Gap: Fiscal Imbalances and Intergovernmental Transfers in Developed Federations," Environment and Planning C, , vol. 22(1), pages 77-102, February.
- Richard Bird & Andrey Tarasov, 2002. "Closing the Gap: Fiscal Imbalaces and Intergovernmental Transfers in Developed Federations," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0202, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
- L. S. Wilson, 1985. "The Socialization of Medical Insurance in Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 18(2), pages 355-376, May.
- Jacques Cremer & Thomas R. Palfrey, 2000. "Federal Mandates by Popular Demand," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 905-927, October.
- Crémer, Jacques & Palfrey, Thomas, 2000. "Federal Mandates by Popular Demand," IDEI Working Papers 120, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2001.
- F. C. Rodrigiuez, 1999. "Does Distributional Skewness Lead to Redistribution? Evidence from the United States," Economics and Politics, Wiley Blackwell, vol. 11(2), pages 171-199, 07.
- Grossman, Philip J, 1994. "A Political Theory of Intergovernmental Grants," Public Choice, Springer, vol. 78(3-4), pages 295-303, March.
- Philip J. Grossman, 1987. "A Political Theory of Inter-Governmental Grants," School of Economics Working Papers 1987-06, University of Adelaide, School of Economics.
- Dixit, Avinash & Londregan, John, 1998. "Fiscal federalism and redistributive politics," Journal of Public Economics, Elsevier, vol. 68(2), pages 153-180, May.
- Patrick Bolton & Gérard Roland, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1057-1090.
- Craig Volden, 2007. "Intergovernmental Grants: A Formal Model of Interrelated National and Subnational Political Decisions," Publius: The Journal of Federalism, Oxford University Press, vol. 37(2), pages 209-243, Spring.
- Tracy Snoddon & Jean-François Wen, 2003. "Grants structure in an intergovernmental fiscal game," Economics of Governance, Springer, vol. 4(2), pages 115-126, 08.
- Robin Boadway & Jean-François Tremblay, 2006. "A Theory of Fiscal Imbalance," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(1), pages 1-27, March.
- Dahlby, Bev, 2009. "The Optimal Taxation Approach to Intergovernmental Grants," Working Papers 2009-16, University of Alberta, Department of Economics.
- Hamilton, Jonathan H., 1986. "The flypaper effect and the deadweight loss from taxation," Journal of Urban Economics, Elsevier, vol. 19(2), pages 148-155, March.
- Robin Boadway & Jean-Francois Tremblay, 2005. "A Theory of Vertical Fiscal Imbalance," Working Papers 2006-04, University of Kentucky, Institute for Federalism and Intergovernmental Relations.
- Robin Boadway & Jean-Francois Tremblay, 2006. "A Theory of Vertical Fiscal Imbalance," Working Papers 1072, Queen's University, Department of Economics.
- Harms, Philipp & Zink, Stefan, 2003. "Limits to redistribution in a democracy: a survey," European Journal of Political Economy, Elsevier, vol. 19(4), pages 651-668, November.
- Atlas, Cary M, et al, 1995. "Slicing the Federal Government Net Spending Pie: Who Wins, Who Loses, and Why," American Economic Review, American Economic Association, vol. 85(3), pages 624-629, June. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ris:albaec:2009_014. 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: (Joseph Marchand)
If references are entirely missing, you can add them using this form.