EconPapers    
Economics at your fingertips  
 

Evaluating the Efficiency and Equity of Federal Fiscal Equalization

David Albouy ()

No 16144, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In theory, federal transfers that make household location decisions efficient should ignore local cost differences, subsidize positive externalities, and offset differences in federal-tax payments and local taxes levied on non-residents, but not local tax revenues from residents. Transfers that redistribute resources equitably across regions will likely target areas with individuals of low earnings potential or low real incomes. Applying these criteria empirically, Canadian equalization policy appears neither efficient nor equitable, but exacerbates pre-existing inefficiencies and underfunds minorities. Locational inefficiencies cost Canada 0.41 percent of income annually and cause over-funded provinces to have populations 31 percent beyond their efficient long-run levels.

JEL-codes: H73 H77 J61 R13 (search for similar items in EconPapers)
Date: 2010-07
New Economics Papers: this item is included in nep-acc and nep-pbe
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Published as Albouy, David, 2012. "Evaluating the efficiency and equity of federal fiscal equalization," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 824-839.

Downloads: (external link)
http://www.nber.org/papers/w16144.pdf (application/pdf)

Related works:
Journal Article: Evaluating the efficiency and equity of federal fiscal equalization (2012) 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:nbr:nberwo:16144

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w16144

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2021-06-04
Handle: RePEc:nbr:nberwo:16144