Ens, Petra2017-10-242017-10-242009https://hdl.handle.net/2445/116972Literature has long learned about the welfare improving effect of equalization in tax competition environments. By setting incentives to local authorities, public spending becomes efficient in spite of relying on a mobile resource as the tax base. This paper proves that this result cannot hold when local players have influence on the shape of the transfer system. A bargaining concerning equalization may change the incentives arising from equalization.39 p.application/pdfengcc-by-nc-nd, (c) Ens, 2009http://creativecommons.org/licenses/by-nc-nd/3.0/es/Relacions fiscals intergovernamentalsCompetència (Dret)Política fiscalIntergovernmental fiscal relationsCompetent authorityFiscal policyinfo:eu-repo/semantics/workingPaperinfo:eu-repo/semantics/openAccess