Arbeitspapier

Interregional redistribution and budget institutions under asymmetric information

Empirical evidence from the U.S. and the European Union suggests that regions which contribute to interregional redistribution face weaker borrowing constraints than regions which benefit from interregional redistribution. This paper presents an argument in favor of such differentiated budgetary institutions. It develops a two-period model of a federation consisting of two types of regions. The federal government redistributes from one type of regions (contributors) to the other type (recipients). It is shown that a fiscal constitution with lax budget rules for contributors and strict budget rules for recipients solves the self-selection problem the federal government faces in the presence of asymmetric information regarding exogenous characteristics of the regions.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 1491

Klassifikation
Wirtschaft
Asymmetric and Private Information; Mechanism Design
Intergovernmental Relations; Federalism; Secession
State and Local Borrowing
Thema
asymmetric information
interregional redistribution
borrowing rules
Finanzausgleich
Öffentliche Schulden
Region
Asymmetrische Information
Finanzföderalismus
Theorie

Ereignis
Geistige Schöpfung
(wer)
Huber, Bernd
Runkel, Marco
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2005

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Huber, Bernd
  • Runkel, Marco
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2005

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