Fiscal Federalism, Local Public Works and Corruption

Martin Besfamille ()

Liege - Groupe d'Etude des Mathematiques du Management et de l'Economie from UNIVERSITE DE LIEGE, Faculte d'economie, de gestion et de sciences sociales, Groupe d'Etude des Mathematiques du Management et de l'Economie

Abstract: In fiscal federal systems, local public works that generate spillovers are often financed by transfers from higher levels of government. In this article, we consider a governmental hierarchy composed by a Federal and a Local Government. The former delegates to the latter the task of finding a firm to undertake a local public work. As the Local Government has more information about the efficiency of the firm, it communicates its private information to the Federal Government which decides the way to fund the project.

Keywords: FEDERALISM; PUBLIC POLICY; CORRUPTION (search for similar items in EconPapers)
JEL-codes: D70 H70 (search for similar items in EconPapers)
Date: 2000

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Working Paper: Fiscal federalism, local public works and corruption (2000)
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Persistent link: http://EconPapers.repec.org/RePEc:fth:gemame:2000/01

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