Flamand, Sabine2017-10-202017-10-202010https://hdl.handle.net/2445/116854We 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.47 p.application/pdfengcc-by-nc-nd, (c) Flamand, 2010http://creativecommons.org/licenses/by-nc-nd/3.0/es/Pareto, Vilfredo, 1848-1923 Fiscal policyDistribució (Teoria econòmica)Política fiscalDescentralització administrativaDistribution (Economic theory)Fiscal policyDecentralization in governmentinfo:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/openAccess