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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/19023| Title: | Sharing budgetary austerity under free mobility and asymmetric information : an optimal regulation approach to fiscal federalism |
| Keywords: | D72 H7 D82 ddc:330 asymmetric information Principal-Agent model public budget deficits freemobility equilibrium fiscal federalism Finanzausgleich Finanzföderalismus Agency Theory Asymmetrische Information Öffentliches Gut Binnenwanderung Abwanderung und Widerspruch Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | In the present article, Tiebout meets Laffont and Tirole in the land of Fiscal Federalism. We use a non-trivial Principal-Multi-Agent model to characterize the optimal intergovernmental grant schedule, when the cost of local public goods depends on hidden characteristics and actions of local governments, and under citizen free mobility. We show that local governments earn informational rents, and how optimal local taxes, public good production levels and land prices are jointly distorted at the second-best optimum, as a consequence of free mobility and asymmetric information. The effect of informational asymmetries is to decrease the average production of public goods and to increase the inter-jurisdictional variance of taxes and public-good production. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/19023 |
| Other Identifiers: | http://hdl.handle.net/10419/19023 ppn:503679356 |
| Appears in Collections: | EconStor |
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