Fiscal Decentralization, Redistribution and Growth

Arbeitspapier

This paper analyzes the welfare implications of a transfer mechanism in a fiscally decentralized economy where local governments select their tax collection effort to maximize their lifetime utility. We consider a transfer rule that both punishes for the lack of efficiency in tax-collection and compensates for the deviation of pre-tax or transfer income from a target level; in addition, a portion of transfers is considered to be directed towards investment. Simulations of the model's optimal solution reveal that increasing punishment always results in increased steady state effort, despite the disincentives that increasing income compensation or directed investment may generate. Increasing punishment also improves capital accumulation the lower the rate of directed investments and the lower the tax rate. Further, efficiency in tax collection is achieved the lower the rate of directed investment and the higher the punishment rate.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 1114

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Fiscal Policy ; State and Local Taxation, Subsidies, and Revenue ; Fiscal and Monetary Policy in Development
• Thema: Fiscal decentralization ; redistribution ; Besteuerungsverfahren ; Dezentralisierung ; Länderfinanzausgleich ; Verteilungswirkung ; Dynamische Wirtschaftstheorie ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Neyapti, Bilin ; Bulut-Cevik, Zeynep Burcu
• Ereignis: Veröffentlichung
• (wer): Koç University-TÜSİAD Economic Research Forum (ERF)
• (wo): Istanbul
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/108560
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ