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The political economy of regional opting out: distributive implications of a prospective Europe of Regions

Giorgio Brosio and Federico Revelli ()

Economics of Governance, 2003, vol. 4, issue 2, 127-142

Abstract: This paper builds up a model for analysing regional attitudes towards separation from national states, where separation implies `opting out' of the national income redistribution system and starting a regional one, while at the same time having direct access to supranational institutions. In an overlapping generations (OLG) framework, we show that interregional cooperation can perform the same task as intergenerational cooperation, and can prevent rich regions from wanting to separate from poor nations. In the second part of the paper, we estimate the impact of alternative institutional settings on regional welfare by using data on the inter-governmental financial relations of the Italian regions with the central government. Copyright Springer-Verlag Berlin Heidelberg 2003

Keywords: Key words: median voter model; income redistribution; overlapping generations; fiscal residuum, JEL classification: D31, D72, (search for similar items in EconPapers)
Date: 2003
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DOI: 10.1007/s101010200053

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