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Title: | Fiscal equalization and political conflict |
Author: | Cubel, Maria |
Keywords: | Crisis polítiques Equilibri (Economia) Descentralització administrativa Political crisis Equilibrium (Economics) Decentralization in government |
Issue Date: | 2010 |
Publisher: | Institut d’Economia de Barcelona |
Series/Report no: | [WP E-IEB10/09] |
Abstract: | In this paper we analyze the political viability of equalization rules in the context of a decentralized country. In concrete terms, we suggest that when equalization devices are perceived as unfair by one or more regions, political conflict may emerge as a result. Political conflict is analysed through a non cooperative game. Regions are formed by identical individuals who, through lobbying, try to impose their regional preferences on the rest of the country, and political conflict is measured as the total contribution to lobbying. We conclude that the onset of conflict depends on the degree of publicness of the regional budget. When regional budgets are used to provide pure public goods, proportional equalization is politically feasible. However, no equalization rule is immune to conflicte when budgets are used to provide private goods or a linear combination of private and public goods. |
Note: | Reproducció del document publicat a: http://www.ieb.ub.edu/2012022157/ieb/ultimes-publicacions |
It is part of: | IEB Working Paper 2010/09 |
URI: | http://hdl.handle.net/2445/116653 |
Appears in Collections: | IEB (Institut d’Economia de Barcelona) – Working Papers |
Files in This Item:
File | Description | Size | Format | |
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IEB10-09_Cubel.pdf | 482.3 kB | Adobe PDF | View/Open |
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