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The structure of political power and redistribution in economies with multiple governments

Raul Ponce Rodriguez (), Ikuho Kochi () and Luis E. Gutiérrez Casas
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Luis E. Gutiérrez Casas: Universidad Autónoma de Ciudad Juárez

Estudios Económicos, 2015, vol. 30, issue 2, 269-303

Abstract: For economies with multiple governments, the effort and effectiveness of public redistribution policies depend on the political structure of the federation. The central government determines the degree of redistribution and the interaction between the preferences and wages of voters controlling, respectively, the central and sub-national governments determine whether income redistribution can be an effective tool to redistribute welfare. In this paper, we identify conditions in which the interaction between the central government and sub-national governments lead to a Pareto superior allocation in the redistribution of income.

Keywords: redistribution; efficiency; federalism; elections (search for similar items in EconPapers)
JEL-codes: H23 H21 H7 H30 D72 (search for similar items in EconPapers)
Date: 2015
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Handle: RePEc:emx:esteco:v:30:y:2015:i:2:p:269-303