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Article
Matching Grants, Income Redistribution and Decentralized Leadership
International Tax and Public Finance
  • Arthur J. Caplan, Utah State University
  • C. Emilson
  • D. Silva
Document Type
Article
Publication Date
1-1-2011
Abstract
We examine the decentralized provision of an impure public good by regional governments in a federation similar in certain respects to both the European Union and the United States. The central authority redistributes income and provides matching grants on a per rate basis after it observes the regions’ contributions to the impure public good. Imperfectly mobile workers react to regional and central governments’ policies by establishing residence in their most preferred region. Despite imperfect labor mobility, we show that the allocation of the impure public good and the interregional income redistribution policy are generally efficient in a federation with decentralized leadership.
Comments

The article is published with the title, "Impure Public Goods, Matching Grant Rates, and Income Redistribution in a Federation with Decentralized Leadership and Imperfect Labor Mobility."

Citation Information
Caplan, Arthur J. and Emilson C.D. Silva (2011) “Impure Public Goods, Matching Grant Rates, and Income Redistribution in a Federation with Decentralized Leadership and Imperfect Labor Mobility.” International Tax and Public Finance, 18(3), 322-336.