# name
Fiscal equalization under political pressures

# metadata.dc.description.abstract[].value
We examine the design of fiscal equalization transfers aimed at interregional redistribution in a setting in which special interest groups distort the fiscal policies of local governments. Equity always calls for tax-base equalization while efficiency calls for tax-base equalization of fiscal capacities backed by strong lobby groups and for taxrevenue equalization of those backed by weak lobby groups. Hence, it is optimal to rely only on tax-base equalization if the special interest groups are similar in terms of lobbying power, whereas a mixed system is optimal if they are highly heterogeneous. Tax competition reinforces the role of tax-base, while tax exporting that of tax-revenue, fiscal equalization.

# metadata.dc.rights[].value
cc-by-nc-nd, (c) Esteller Moré et al., 2015

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

# metadata.dc.title[].value
Fiscal equalization under political pressures