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The impact of fiscal decentralization on income segregation

Francisco Martínez-Mora

No E2004/68, Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces

Abstract: We investigate how decentralizing the provision and funding of a publicly provided good from central (or regional) to local governments affects income segregation in an urban area. As the previous theoretical literature suggests, local provision and funding of a publicly provided good by itself generates incentives for income segregation. However, other segregating forces such as local amenities are also at work in urban areas. We show that, once this important feature of urban economies is considered, decentralisation will reduce income segregation if the population has heterogeneous preferences for the publicly provided good.

Keywords: fiscal decentralisation; segregation; Tiebout; residential mobility. (search for similar items in EconPapers)
JEL-codes: H42 H73 H77 R13 R31 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2004
New Economics Papers: this item is included in nep-geo and nep-pbe
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