EconPapers    
Economics at your fingertips  
 

Public budget composition, fiscal (de)centralization, and welfare

Calin Arcalean (), Gerhard Glomm (), Ioana Schiopu () and Jens Suedekum ()

Canadian Journal of Economics, 2010, vol. 43, issue 3, 832-859

Abstract: We study the optimal degree of fiscal decentralization in a dynamic federal economy where governments decide on budget size and its allocation between public education and infrastructure spending. We find that full centralization of tax and expenditure policies is optimal when infrastructure productivity is similar across regions. When differences are not too large, partial centralization is optimal. With strong differences, full decentralization becomes optimal. National steady-state output tends to be highest under full decentralization. We provide a justification for the mixed evidence regarding the Oates conjecture by showing that full dominates partial decentralization, despite being inferior to complete decentralization.

JEL-codes: H72 H74 E62 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/j.1540-5982.2010.01597.x (text/html)
access restricted to subscribers

Related works:
Journal Article: Public budget composition, fiscal (de)centralization, and welfare (2010) Downloads
Working Paper: Public Budget Composition, Fiscal(De)Centralization, and Welfare (2007) Downloads
Working Paper: Public Budget Composition, Fiscal (De)Centralization and Welfare (2007) Downloads
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:cje:issued:v:43:y:2010:i:3:p:832-859

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Katherine Cuff

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().

 
Page updated 2020-08-07
Handle: RePEc:cje:issued:v:43:y:2010:i:3:p:832-859