Fiscal federalism and public inputs provisionvertical externalities matter

  1. Martínez López, Diego
Llibre:
XIII Encuentro de Economía Pública: Playadulce (Almería), Hotel Playadulce. 2 y 3 de febrero

Editorial: Servicio de Publicaciones ; Universidad de Almería

ISBN: 84-8240-795-3

Any de publicació: 2006

Pàgines: 44

Congrés: Encuentro de Economía Pública (13. 2006. Almeria)

Tipus: Aportació congrés

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Resum

This paper studies the provision of public inputs in a federal system. A vertical tax externality is also considered in a simple general equilibrium model used to analyze the efficiency of equilibria under different scenarios. The results show that the state provision of public inputs may affect ambiguously federal tax revenues, depending on the vertical tax externality, amongst others issues. Moreover, it is proved that achieving a second best allocation is not straightforward for a federal government that plays as Stackelberg leader. At this point, the state�s reaction function becomes crucial when the design of vertical grants is restricted.

Fuente de los datos: Dialnet