The cost of regional equity in Denmark: Goal attainment or incentive distortions*

Torben Schmidt

Papers in Regional Science, 2008, vol. 87, issue 4, 567-587

Abstract: Abstract National governments often delegate tasks and burdens to lower levels in a comprehensive system of administration. Local and regional governance thereby become an important factor in policy implementation. This paper focuses on the incentive problem that follows from the delegation of competences to collect taxes to the local level in a multi‐level geo‐administrative system. The paper uses the Danish administrative system to illustrate the actual outcomes from such incentive problems. It focuses on goal attainment in the presence of decentralised financing and offers policy recommendations with respect to policy design within decentralised financing systems. Setting up elaborate administrative systems will introduce agency problems in terms of financing that lead to inefficiencies in both local and national governance. Resumen Los gobiernos nacionales delegan a menudo tareas y responsabilidades a los niveles inferiores dentro de un sistema administrativo completo. La gobernanza local y regional se convierte de ese modo un factor importante en la implementación de políticas. Este artículo se centra en el problema de incentivos causado por la delegación las competencias de recaudación de impuestos a nivel local en un sistema geoadministrativo de nivel múltiple. El artículo utiliza el sistema administrativo danés para ilustrar los resultados reales de tales problemas de incentivos. Se centra en el logro de un objetivo en presencia de una financiación descentralizada y ofrece recomendaciones de políticas con respecto al diseño de políticas dentro de sistemas de financiamiento descentralizado. El establecer sistemas administrativos complicados introducirá problemas de agencias en términos de financiación que llevará a una falta de eficiencia en la gobernanza local y nacional.

Date: 2008
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https://doi.org/10.1111/j.1435-5957.2008.00172.x

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Persistent link: https://EconPapers.repec.org/RePEc:bla:presci:v:87:y:2008:i:4:p:567-587

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