Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95467
Authors: 
Bouton, Laurent
Gassner, Marjorie
Verardi, Vincenzo
Year of Publication: 
2007
Series/Report no.: 
LIS Working Paper Series 420
Abstract: 
From the literature on decentralization, it appears that the fiscal vertical imbalance is somehow inherent to multi-level governments. Using a stylized model we show that this leads to a reduction in the extent of redistributive fiscal policies if the maximal tolerable size of government has been reached. To test for this empirically we use some high quality data, from the LIS dataset, on individual incomes. The results are highly significant and point in the direction of our theoretical predictions.
Subjects: 
Vertical Fiscal Imbalance
Income Inequality
Fiscal Federalism
JEL: 
H11
H77
I38
Document Type: 
Working Paper
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