Bulletin n. 2-3/2012 | ||
October 2012-February 2013 | ||
Libman Alexander |
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Sub-national political regimes and asymmetric fiscal decentralization | ||
in Constitutional political economy , Volume 23, Issue 4, December 2012 , 2012 , 302-336 | ||
This paper develops a model to explain how sub-national political regimes affect the variation in retention rates in a country in which a region and a central government bilaterally bargain over the distribution of tax revenue given a particular tax rate (and thus fiscal decentralization is asymmetric). This study examines cases in which both sub-national and national governments have the same political regime (democracies and non-democracies) and situations in which the central and regional political regimes differ. This article shows that in the latter case, regions receive a smaller share of tax revenue for a broad set of parameters of the model (as opposed to the case of a pure non-democracy); in the case of identical political regimes, the comparative fiscal decentralization is determined by the productivity-enhancing effect of regional public goods. | ||