Redistribution and Provision of Public Goods in an Economic Federation

Thomas Aronsson and Sören Blomquist

Journal of Public Economic Theory, 2008, vol. 10, issue 1, 125-143

Abstract: This paper concerns redistribution and public good provision in an economic federation with two levels of government: a local government in each locality and a (first mover) central government. Each locality is characterized by two ability‐types, and the ability‐distribution differs across localities. The central government redistributes via a nonlinear income tax and a lump‐sum transfer to each local government, while the local governments use proportional income taxes and provide local public goods. We show how the redistributive role of taxation is combined with a corrective role, and how the central government can implement the second best resource allocation.

Date: 2008
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Citations: View citations in EconPapers (17)

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https://doi.org/10.1111/j.1467-9779.2008.00354.x

Related works:
Working Paper: Redistribution and Provision of Public Goods in an Economic Federation (2004)
Working Paper: Redistribution and Provision of Public Goods in an Economic Federation (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:10:y:2008:i:1:p:125-143

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