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URL:
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http://ub-madoc.bib.uni-mannheim.de/1486
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URN:
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urn:nbn:de:bsz:180-madoc-14863
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Document Type:
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Working paper
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Year of publication:
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2007
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Publication language:
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English
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Institution:
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Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
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MADOC publication series:
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Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
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Subject:
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330 Economics
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Classification:
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JEL:
H77 H72 ,
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Subject headings (SWD):
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Steuerpolitik , Steuergerechtigkeit , Öffentliche Förderung , Deutschland
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Keywords (English):
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Fiscal competition , Fiscal equalisation , Intergovernmental grants , Public expenditure , Germany
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Abstract:
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This paper uses a simple model of fiscal competition between local jurisdictions to analyse the impact of intergovernmental grants on the composition of public spending. We find that a higher degree of redistribution within a system of ”fiscal equalisation” coincides with a smaller overall share of spending on productivity-enhancing public inputs. Furthermore, in order to test the theoretical predictions, we carry out an empirical analysis based on a panel of German states. The results are consistent with the theoretical findings and support the existence of an incentive effect of intergovernmental grants on state expenditure policies.
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Additional information:
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[Working paper]
![[img]](https://madoc.bib.uni-mannheim.de/style/images/fileicons/application_pdf.png)
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