Australian Federalism: A CGE Analysis of Inter-government Transfers

Peter B. Dixon, Mark Picton and Maureen T. Rimmer

No 331008, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Using a general equilibrium model, we calculate that adoption of equal-per-capita funding of the States by the Commonwealth would raise Australian welfare by at least $150 million annually. Under the present funding system, governments in subsidized States exhibit a flypaper effect: money thrown at them sticks even though households would be better served if it were passed on through lower taxes. Our results are not very sensitive to variations in assumptions concerning population mobility and fiscal externalities. Only by making extreme assumptions concerning congestion or by eliminating flypaper effects could we produce results with annual welfare gains below $150 million.

Keywords: Political Economy; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 21
Date: 2002
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/331008/files/458.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331008

Access Statistics for this paper

More papers in Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().