Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314717 
Year of Publication: 
2025
Series/Report no.: 
CESifo Working Paper No. 11678
Publisher: 
CESifo GmbH, Munich
Abstract: 
Although reassignment of policy instruments among governments in many federations is a recurring event, there is no widely accepted, positive model of the phenomenon. This stands in contrast to the well established body of work on the normative theory of the efficient federal assignment. In this paper, I study reassignment of the power to tax in the Canadian federation by considering three elements that are likely to be part of any complete, positive analysis. These are: the facts that characterize the fiscal history of reassignment in the Canadian federation; the logic behind the demand for tax and other instruments by provincial and national governments; and the analysis of intergovernmental trade in governing instruments, which adds the supply of instruments and closes the model. While the story I tell is constructed to deal with the Canadian case, I hope that some of the ideas and issues I raise will generalize.
Subjects: 
federal constitution
reassignment
demand and supply of governing instruments
power to tax
political competition
fiscal history
Canadian fiscal federalism
JEL: 
H10
H77
D72
D78
Document Type: 
Working Paper
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