Optimal fiscal decentralization: Redistribution and welfare implications

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• 作者：Erkmen Giray Aslim^a ; ^{era314@lehigh.edu} ; Bilin Neyapti^b ; ^{neyapti@bilkent.edu.tr}
• 关键词：E62 ; H77
• 刊名：Economic Modelling
• 出版年：2017
• 出版时间：February 2017
• 年：2017
• 卷：61
• 期：Complete
• 页码：224-234
• 全文大小：894 K
• 卷排序：61

文摘

The literature is inconclusive on the welfare effects of fiscal decentralization (FD). We present a formal model to analyze the welfare and redistributive effects of FD. As an increase in the tax rate reduces tax effort, FD increases to improve welfare. We show that extreme levels of FD lower welfare and worsen income distribution. When regional spillovers exist, increasing FD decreases welfare and redistribution.