Discussion Paper Details

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Title: Federal Fiscal Constitutions. Part II: Risk Sharing and Redistribution

Author(s): Torsten Persson and Guido Tabellini

Publication Date: February 1995

Keyword(s): Fiscal Federalism, Redistribution and Voting

Programme Area(s): International Macroeconomics

Abstract: The paper studies the political and economic determinants of inter-regional public transfers. It points to an important difference between two alternative federal fiscal constitutions. The paper shows that inter-regional transfers can be determined either by a federation-wide vote over a centralized social insurance system, or by bargaining over intergovernmental transfers. When regions are asymmetric, the federal social insurance system leads to a larger fiscal programme.

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Bibliographic Reference

Persson, T and Tabellini, G. 1995. 'Federal Fiscal Constitutions. Part II: Risk Sharing and Redistribution'. London, Centre for Economic Policy Research.