Strategic Inter–Regional Transfers

Jean Hindriks and Gareth Myles ()

Journal of Public Economic Theory, 2003, vol. 5, issue 2, 229-248

Abstract: We derive the equilibrium level of redistribution from one mobile factor (say, the rich or capital) to another possibly mobile factor (say, the poor or labour) when regions choose both their inter–regional transfers and redistributive policies non–cooperatively. It is shown that inter–regional transfers are always desirable (to mitigate the fiscal competition), but cannot be sustained (as a Nash equilibrium) when chosen simultaneoulsy with the redistributive policy. On the other hand, if regions can pre–commit to inter–regional transfers before setting their redistributive policy, their strategic effect makes efficient inter–regional transfers sustainable. However, there are also equilibria with inefficiently small inter–regional transfers or no transfers at all. The effects of regional asymmetries and additional regions on these results are also analyzed.

Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://doi.org/10.1111/1467-9779.00131

Related works:
Working Paper: Strategic inter-regional transfers (2003)
Working Paper: Strategic inter-regional transfers (2001)
Working Paper: Strategic Inter-Regional Transfers (2000)
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:bla:jpbect:v:5:y:2003:i:2:p:229-248

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().