Redistribution and provision of public goods in an economic federation
2008 (English)In: Journal of Public Economic Theory, ISSN 1097-3923, E-ISSN 1467-9779, Vol. 10, no 1, 125-143 p.Article in journal (Refereed) Published
This paper concerns redistribution and public good provision in an economic federation with two levels of government:a local government in each locality and a (first mover) central government. Each locality is characterized by two ability-types, and the ability-distribution differs across localities. The central government redistributes via a nonlinear income tax and a lump-sum transfer to each local government, while the local governments use proportional income taxes and provide local public goods.We show how the redistributive role of taxation is combined with a corrective role, and how the central government can implement the second best resource allocation.
Place, publisher, year, edition, pages
2008. Vol. 10, no 1, 125-143 p.
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-108548DOI: 10.1111/j.1467-9779.2008.00354.xISI: 000252588300006OAI: oai:DiVA.org:uu-108548DiVA: diva2:236272