Fiscal decentralization under free mobility

Auteur :
SCHWEIZER, U.

Description :
In this paper it is shown that, under the proper convexity assumption, any efficient allocation of an economy subdivided into locationally separated regions can be sustained by means of fiscal decentralization with profit maximizing local governments. For that to be true, however, a system of intergovernmental grants is needed. Without such grants, fiscal decentralization and Tiebout equilibria are closely related concepts. Since a Tiebout equilibrium generally fails to exist (Bewley (1981)), these grants play an important role not only for redistribution but, in the first place, to make fiscal decentralization a feasible allocation mechanism.


Type de document :
Article de périodique

Source :
Regional science and urban economics Amsterdam, 1984, vol. 14, n°. 3, p. 317-329, Références bibliographiques : 8 réf.

Date :
1984