Federalism, Horizontal Equity, and the Optimal Grant

Alan Hamlin

Public Finance Review, 1985, vol. 13, issue 2, 115-131

Abstract: Federalism is often argued to produce a particular problem in designing hori- Abstract zontal equity policy that may be partially overcome by the use of intergovernmental grants. The nature of the federal equity problem is reconsidered; it is argued that only a specific subclass offederations suffer from an inherent equity problem and that in these cases, the use of grants is a necessary part of the problem rather than its solution. The specific choice ofgrant is reconsidered in the context of simple majority voting on local issues to illustrate a difficulty in the identification of the optimal grant.

Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:13:y:1985:i:2:p:115-131

DOI: 10.1177/109114218501300201

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