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Need Equalization transfers and Productive Efficiency of Local Governments

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Abstract

We analyse, with a simple stylized model, the impact of the change of parameters of Need equalization formula for intergovernmental grants on productive efficiency of a local government providing a public service. In our context, this kind of efficiency means producing, at minimum costs and at high quality, a output level at least equal to a minimum standard, fixed by the central government for pursuing horizontal equity among jurisdictions.

Suggested Citation

  • Alessandro Petretto, 2010. "Need Equalization transfers and Productive Efficiency of Local Governments," Working Papers - Economics wp2010_14.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2010_14.rdf
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    References listed on IDEAS

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    1. Mr. Bob Searle & Mr. Ehtisham Ahmad, 2005. "On the Implementation of Transfers to Subnational Governments," IMF Working Papers 2005/130, International Monetary Fund.
    2. Besley, Timothy, 2007. "Principled Agents?: The Political Economy of Good Government," OUP Catalogue, Oxford University Press, number 9780199283910.
    3. Robin Boadway & Anwar Shah, 2007. "Intergovernmental Fiscal Transfers : Principles and Practice," World Bank Publications - Books, The World Bank Group, number 7171.
    4. Duc Hong Vo, 2010. "The Economics Of Fiscal Decentralization," Journal of Economic Surveys, Wiley Blackwell, vol. 24(4), pages 657-679, September.
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    Cited by:

    1. Alessandro Petretto, 2014. "A note on standard costs criteria for allocating the Italian national health fund to Regions," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2014(2), pages 5-21.

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    More about this item

    Keywords

    Need Equalization; local public services provision; quality and costefficiency;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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