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Title:	Tobin meets Oates: Solidarity and the optimal fiscal federal structure
Author:	Calsamiglia, Xavier; Garcia-Milà, Teresa; McGuire, Therese J.
Other authors:	Universitat Pompeu Fabra. Departament d'Economia i Empresa
Abstract:	We explore the implications for the optimal degree of fiscal decentralization when people spreferences for goods and services, which classic treatments of fiscal federalism (Oates, 1972)place in the purview of local governments, exhibit specific egalitarianism (Tobin, 1970), orsolidarity. We find that a system in which the central government provides a common minimumlevel of the publicly provided good, and local governments are allowed to use their ownresources to provide an even higher local level, performs better from an efficiency perspectiverelative to all other systems analyzed for a relevant range of preferences over solidarity.
Subject(s):	-fiscal decentralization -specific egalitarianism -solidarity -externalities. -Macroeconomics and International Economics
Rights:	L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons http://creativecommons.org/licenses/by-nc-nd/3.0/es/
Document type:	Working Paper
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