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Decentrqalized Redistribution in a Laboratory Federation

Fiscal federalism is often hailed as an innovation procedure: successful policy experiments in one jurisdiction will, via imitation, spread through the entire system, leading to overall better policy performance. We show that such hopes set in laboratory federalism may be ill-founded. For a standard framework of decentralized redistribution in a common labor market with mobile transfer recipients imitationwith- experimentation will lead to a complete breakdown of the welfare state: zero transfers.

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File URL: http://homepage.univie.ac.at/Papers.Econ/RePEc/vie/viennp/vie1402.pdf
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Paper provided by University of Vienna, Department of Economics in its series Vienna Economics Papers with number 1402.

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Date of creation: Feb 2014
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Handle: RePEc:vie:viennp:1402
Contact details of provider: Web page: http://www.univie.ac.at/vwl

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  1. Kollman, Ken & Miller, John H & Page, Scott E, 2000. "Decentralization and the Search for Policy Solutions," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 102-28, April.
  2. Fernando Vega Redondo, 1996. "The evolution of walrasian behavior," Working Papers. Serie AD 1996-05, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  3. Tanaka, Yasuhito, 2000. "Stochastically stable states in an oligopoly with differentiated goods: equivalence of price and quantity strategies," Journal of Mathematical Economics, Elsevier, vol. 34(2), pages 235-253, October.
  4. Ana B. Ania & Andreas Wagener, 2009. "The Open Method of Coordination (OMC) as an Evolutionary Learning Process," CESifo Working Paper Series 2601, CESifo Group Munich.
  5. Federico Revelli, 2002. "Testing the taxmimicking versus expenditure spill-over hypotheses using English data," Applied Economics, Taylor & Francis Journals, vol. 34(14), pages 1723-1731.
  6. Jan K. Brueckner, 1999. "Welfare Reform and the Race to the Bottom: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 505-525, January.
  7. Salmon, Pierre, 1987. "Decentralisation as an Incentive Scheme," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages 24-43, Summer.
  8. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-56, August.
  9. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
  10. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
  11. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
  12. Wildasin, David E, 1991. "Income Redistribution in a Common Labor Market," American Economic Review, American Economic Association, vol. 81(4), pages 757-74, September.
  13. Andreas Wagener, 2009. "Tax Competition, Relative Performance and Policy Imitation," CESifo Working Paper Series 2723, CESifo Group Munich.
  14. Revelli, Federico, 2006. "Performance rating and yardstick competition in social service provision," Journal of Public Economics, Elsevier, vol. 90(3), pages 459-475, February.
  15. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  16. Saavedra, Luz Amparo, 2000. "A Model of Welfare Competition with Evidence from AFDC," Journal of Urban Economics, Elsevier, vol. 47(2), pages 248-279, March.
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