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Fiscal federalism and bargaining over transfers

Author

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  • Vander Lucas

    (IRES/UCL, Belgium and Universidade Catolica de Brasilia, Brazil)

Abstract

In this paper we provide a theoretical analysis of transfer sharing in a federalist economy by means of bargaining among regions and the federal government. The federal government could decide either to negotiate simultaneously with each region (bilateral negotiation), to negotiate with all regions together at the same table (multilateral negotiation), to negotiate under the pattern bargaining, or to negotiate under a sequential bargaining. Pattern bargaining is the most preferable bargaining way on the point of view of the federal government. However, with one-sided asymmetric spillover effects the federal government attains a higher payoff under multilateral bargaining.

Suggested Citation

  • Vander Lucas, 2002. "Fiscal federalism and bargaining over transfers," Economics Bulletin, AccessEcon, vol. 28(13), pages 1.
    • Handle: RePEc:ebl:ecbull:eb-02aa0018
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    File URL: http://www.accessecon.com/pubs/EB/2002/Volume28/EB-02AA0018A.pdf
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    Cited by:

    1. Michele Giuseppe Giuranno, 2009. "Regional Income Disparity and the Size of the Public Sector," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(5), pages 697-719, October.
    2. Giuranno, Michele Giuseppe, 2005. "Income Inequality and the Size of the Public Sector," Economics Discussion Papers 8895, University of Essex, Department of Economics.
    3. Torrisi, Gianpiero & Pike, Andy & Tomaney, John & Tselios, Vassilis, 2011. "Defining and measuring decentralisation: a critical review," MPRA Paper 51441, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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