Decentralized Redistribution in a Laboratory Federation

Ana Ania and Andreas Wagener

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: Fiscal federalism is often hailed as an innovation procedure: successful policy experiments in one jurisdiction will, via imitation, spread through the entire system, leading to overall better policy performance. We show that such hopes set in laboratory federalism may be ill-founded. For a standard framework of decentralized redistribution in a common labor market with mobile transfer recipients imitation-with-experimentation will lead to a complete breakdown of the welfare state: zero transfers.

JEL-codes: C73 H75 H77 (search for similar items in EconPapers)
Date: 2014-02
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Related works:
Journal Article: Decentralized redistribution in a laboratory federation (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:vie:viennp:vie1402

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