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Abstract:

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 ex-post 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. © 2003 Elsevier B.V. All rights reserved.

Registro:

Documento: Artículo
Título:Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline
Autor:Sanguinetti, P.; Tommasi, M.
Filiación:Department of Economics, Universidad Torcuato Di Tella, Buenos Aires 1428, Argentina
Univ.San Andres/Ctr.Stud.Inst.Devmt., Buenos Aires, Argentina
Palabras clave:Common pool; Fiscal federalism; Insurance; Intergovernmental transfers; Risk sharing; insurance system; intergovernmental relations; risk factor; theoretical study; North America; United States
Año:2004
Volumen:62
Número:1
Página de inicio:149
Página de fin:170
DOI: http://dx.doi.org/10.1016/S0022-1996(03)00045-X
Título revista:Journal of International Economics
Título revista abreviado:J. Int. Econ.
ISSN:00221996
Registro:https://bibliotecadigital.exactas.uba.ar/collection/paper/document/paper_00221996_v62_n1_p149_Sanguinetti

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Citas:

---------- APA ----------
Sanguinetti, P. & Tommasi, M. (2004) . Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline. Journal of International Economics, 62(1), 149-170.
http://dx.doi.org/10.1016/S0022-1996(03)00045-X
---------- CHICAGO ----------
Sanguinetti, P., Tommasi, M. "Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline" . Journal of International Economics 62, no. 1 (2004) : 149-170.
http://dx.doi.org/10.1016/S0022-1996(03)00045-X
---------- MLA ----------
Sanguinetti, P., Tommasi, M. "Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline" . Journal of International Economics, vol. 62, no. 1, 2004, pp. 149-170.
http://dx.doi.org/10.1016/S0022-1996(03)00045-X
---------- VANCOUVER ----------
Sanguinetti, P., Tommasi, M. Intergovernmental transfers and fiscal behavior insurance versus aggregate discipline. J. Int. Econ. 2004;62(1):149-170.
http://dx.doi.org/10.1016/S0022-1996(03)00045-X