Paper #1226

Título:

Tobin meets Oates: Solidarity and the optimal fiscal federal structure

Autores:

Xavier Calsamiglia, Teresa Garcia-Milà y Therese J. McGuire

Fecha:

Julio 2010

Resumen:

We explore the implications for the optimal degree of fiscal decentralization when people�s preferences for goods and services, which classic treatments of fiscal federalism (Oates, 1972) place in the purview of local governments, exhibit specific egalitarianism (Tobin, 1970), or solidarity. We find that a system in which the central government provides a common minimum level of the publicly provided good, and local governments are allowed to use their own resources to provide an even higher local level, performs better from an efficiency perspective relative to all other systems analyzed for a relevant range of preferences over solidarity.

Palabras clave:

fiscal decentralization, specific egalitarianism, solidarity, externalities.

Códigos JEL:

H42, H77.

Área de investigación:

Macroeconomía y Economía Internacional

Publicado en:

International Tax and Public Finance, Vol. 20, Issue 3, 2013, pp. 450-473

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