Arbeitspapier
Optimal Design of Intergovernmental Grants under Asymmetric Information
This paper develops a theoretical explanation why it may be optimal for higher-level governments to pay categorical block grants or closed-ended matching grants to local governments. We consider a federation with two types of local governments which differ in the cost of providing public goods. The federal government redistributes between jurisdictions, but cannot observe the type of a jurisdiction. In this asymmetric information setting it is shown that the second-best optimum can be decentralized with the help of categorical block grants and closed-ended matching grants, but not with unconditional block grants or open-ended matching grants.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 919
- Klassifikation
-
Wirtschaft
- Thema
-
asymmetric information
categorical block grants
closed-ended matching grants
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Huber, Bernd
Runkel, Marco
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2003
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Huber, Bernd
- Runkel, Marco
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2003
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