# name
Interregional transfers, group loyalty and the decentralization of redistribution

# metadata.dc.description.abstract[].value
We study the decentralization of redistributive taxation in a political economy model assuming regional heterogeneity regarding both group identity and average income. If a centralized system permits a beneficial pooling of national resources, it might also decrease the degree of solidarity in the society. With no group loyalty, centralization Pareto-dominates decentralization even when regions are not identical. Furthermore, increased heterogeneity need not increase the relative efficiency of decentralization. If regions are equally rich, centralization Pareto-dominates decentralization whenever group loyalty is not perfect. Finally, centralization is always more efficient than decentralization even when allowing for interregional transfers.

# metadata.dc.source[].value
IEB (Institut d’Economia de Barcelona) – Working Papers

# metadata.dc.subject.classification[].value
Pareto, Vilfredo, 1848-1923

Fiscal policy

# metadata.dc.title[].value
Interregional transfers, group loyalty and the decentralization of redistribution