Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline

• 成果类型: Article
• 署名作者: Sanguinetti, P; Tommasi, M
• 署名单位: Universidad Torcuato Di Tella; Universidad de San Andres Argentina
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(03)00045-X
• 发表日期: 2004
• 页码: 149-170
• 关键词: common pool; Fiscal federalism; insurance; intergovernmental transfers; risk sharing

摘要

This paper evaluates the trade-off between the advantages of risk sharing and the perils of common pool problems in federal fiscal arrangements. Under the assumption of asymmetric information we evaluate two alternative regimes of intergovernmental transfers. In one regime, the central government pre-commits to a certain level of transfers that compensate vertical fiscal imbalances and provide some limited ex-ante insurance. In the other regime, it accommodates expost the fiscal needs of the different provinces. In this second case, full-insurance results, but the economy is subject to a tragedy of the fiscal commons, with excessive subnational spending, insufficient local taxation, and reduced production of federal public goods. We find the range of parameters for which one or the other institutional regime will be preferable. The result is a fiscal-federalism version of the usual trade-off between rules and discretion. (C) 2003 Elsevier B.V. All rights reserved.