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Theoretical Analysis of Equalization and Spatial Location Efficiency

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  • Jeff Petchey

Abstract

Petchey J. Theoretical analysis of equalization and spatial location efficiency, Regional Studies. This paper shows that regional economies, such as federations or unitary countries with sub-national governments, may need a system of optimal inter-regional transfers to correct for various types of externalities related to factor mobility and location decisions. It is then argued that equalization schemes that take account of the differing expenditure and revenue needs of regions create a pattern of inter-regional transfers of income, but that they are inconsistent with what is required for spatial efficiency. Therefore, equalization is incompatible with the efficient spatial allocation of mobile factors of production. It is also shown that regions have an incentive to act strategically over equalization and distort their provision of local public goods. [image omitted] Petchey J. Une analyse theorique de l'egalisation et de l'efficacite de la localisation geographique, Regional Studies. Cet article cherche a demontrer que les economies regionales, telles les federations ou bien les pays unitaires dotes de gouvernements sous-nationaux, pourraient avoir besoin d'un systeme de transferts interregionaux optimaux afin de corriger des differents effets externes qui se rapportent a la mobilite des facteurs et a la localisation. On affirme que les plans d'egalisation qui tiennent compte de la variation des besoins des regions en depenses et en revenus, creent une distribution des transferts de revenu interregionaux, mais qu'ils ne correspondent pas a ce dont on a besoin pour assurer l'efficacite geographique. Par la suite, l'egalisation est inconciliable avec l'affectation geographique efficace des facteurs de production mobiles. On demontre aussi que les regions ont tout interet a agir de facon strategique quant a l'egalisation et a fausser la mise a disposition des biens publics locaux. Economies regionales Localisation geographique Egalisation Migration Comportement de l'administration regionale Differentiels inter-juridictionnels Rapports intergouvernementaux Petchey J. Eine theoretische Analyse von Ausgleich und raumlicher Standorteffizienz, Regional Studies. In diesem Beitrag wird dargelegt, dass regionale Okonomien, wie z. B. Bundesstaaten oder Einheitsstaaten mit subnationalen Regierungen, ein System optimaler interregionaler Transfers benotigen konnten, um verschiedene Arten von Externalitaten im Zusammenhang mit der Faktormobilitat und den Standortentscheidungen zu korrigieren. Anschliessend wird argumentiert, dass Ausgleichsplane, in denen die verschiedenen benotigten Ausgaben und Einnahmen der Regionen berucksichtigt werden, ein Muster aus interregionalen Einkommenstransfers erzeugen, aber nicht den Anforderungen fur eine raumliche Effizienz gerecht werden. Aus diesem Grund ist ein Ausgleich nicht mit einer effizienten raumlichen Zuweisung von mobilen Produktionsfaktoren kompatibel. Ebenso wird gezeigt, dass fur die Regionen ein Anreiz vorhanden ist, hinsichtlich des Ausgleichs strategisch vorzugehen und ihre Bereitstellung von lokalen offentlichen Gutern zu verzerren. Regionalwirtschaften Raumlicher Standort Ausgleich Migration Verhalten von Regionalregierungen Differentiale zwischen Rechtsprechungen Beziehungen zwischen Regierungen Petchey J. Un analisis teorico de ecualizacion y eficacia espacial de ubicacion, Regional Studies. En este articulo demuestro que las economias regionales, tales como federaciones o paises unitarios con gobiernos subnacionales, podrian necesitar un sistema de transferencias interregionales optimas para corregir los diferentes tipos de efectos externos relacionados con la movilidad de factores y las decisiones de ubicacion. Argumento que los esquemas de ecualizacion que tienen en cuenta las diferencias en las regiones en cuanto a las necesidades de gastos e ingresos crean un modelo de transferencias interregionales de ingresos pero son incoherentes con respecto a lo que se requiere para la eficacia espacial. Por consiguiente, la ecualizacion es incompatible con una asignacion espacial eficaz de los factores moviles de produccion. Tambien demuestro que las regiones tienen un incentivo para actuar estrategicamente sobre la ecualizacion y para distorsionar sus provisiones de mercancias publicas a nivel local. Economias regionales Ubicacion espacial Ecualizacion Migracion Comportamiento de los gobiernos regionales Diferenciales interjurisdiccionales Relaciones intergubernamentales

Suggested Citation

  • Jeff Petchey, 2009. "Theoretical Analysis of Equalization and Spatial Location Efficiency," Regional Studies, Taylor & Francis Journals, vol. 43(7), pages 899-914.
  • Handle: RePEc:taf:regstd:v:43:y:2009:i:7:p:899-914
    DOI: 10.1080/00343400801969500
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    References listed on IDEAS

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    1. Jorge Martinez-Vazquez & Bob Searle, 2007. "Challenges in the Design of Fiscal Equalization and Intergovernmental Transfers," Springer Books, in: Jorge Martinez-Vazquez & Bob Searle (ed.), Fiscal Equalization, chapter 0, pages 3-10, Springer.
    2. Lars P. Feld & Gebhard Kirchgässner & Christoph A. Schaltegger, 2004. "Fiscal Federalism and Economic Performance: Evidence from Swiss Cantons," Marburg Working Papers on Economics 200420, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
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    1. Gary Madden & Jeffrey Petchey & Aaron Morey, 2011. "Recent Australian Infrastructure Liberalization," Chapters, in: Matthias Finger & Rolf W. Künneke (ed.), International Handbook of Network Industries, chapter 26, Edward Elgar Publishing.

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