Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192697 
Year of Publication: 
2012
Series/Report no.: 
Discussion Papers No. 715
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
Many countries apply cost-equalization and/or fiscal capacity equalization formulas to enable sub-national governments to provide comparable service standards at comparable tax rates. This paper demonstrates how measures of expenditure needs and fiscal capacity can be derived from a structural model of local government spending and taxing behavior. The structural parameters are shown to provide the information required to implement equalization according to the principle of horizontal equity.
Subjects: 
Fiscal Equalization
Expenditure Needs
Fiscal Capacity
Structural Modeling
JEL: 
H71
H72
Document Type: 
Working Paper

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