Comparative analysis of optimal conditional transfers in a fiscally centralized federation
The international evidence shows that the spending of sub-national governments depends on unconditional transfers from the central government. This evidence makes relevant the following question: What is the optimal design of inter-governmental transfers? In this article we provide an answer to this...
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| Main Authors: | , |
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| Format: | Artículo |
| Language: | spa |
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Universidad Autónoma de Ciudad Juárez
2021
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| Subjects: | |
| Online Access: | http://erevistas.uacj.mx/ojs/index.php/noesis/article/view/253 |
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| Summary: | The international evidence shows that the spending of sub-national governments depends on unconditional transfers from the central government. This evidence makes relevant the following question: What is the optimal design of inter-governmental transfers? In this article we provide an answer to this question. The main contribution of this article is the characterization of optimal unconditional intergovernmental transfers. We also contribute to the literature, by providing empirically verifiable hypotheses on how the federal transfers from the central government depend on the interregional inequality of income, the distribution and magnitude of interregional spillovers of sub-national expenditures, and the deadweight labor costs associated with taxation and intergovernmental transfers. |
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| ISSN: | 2395-8669 |