Regional fiscal flows: Measurment tools

Abstract

This paper discusses the methodology for the calculation of federal fiscal flows in a federation and the measurement of interregional redistribution. It identifies five major steps: (a) the selection of the approach for calculating federal fiscal flows, (b) the allocation of federal revenues and expenditures among regions, (c) the choice of the appropriate concept of regional economic disparities, (d) the selection of the relevant indicators of interregional redistribution, and (e) the estimation of these indicators. It concludes with some suggestions for further research, stressing the need to develop a common methodology and to place the study of interregional redistribution in a dynamic context.