Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76439 
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper No. 845
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
The paper derives a normative model for partial fiscal equalisation based on a number of axioms and allows for the existence of a specific fiscal need in the jurisdictions. The theoretical model is then empirically tested for the case of the European Union using data from 1986-97. It is found that most restrictions of the model appear to hold, in particular, relatively richer countries contribute more and those with greater fiscal needs, approximated by the importance of the agricultural sector, pay less. However, in the EU, an adjustment of net payments to changes in the actual importance of the spe-cific fiscal need for a country is lacking
Document Type: 
Working Paper
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