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Article Dans Une Revue Review of Institution and Economics Année : 2012

Fairness and decentralization : a tale of two countries

Résumé

Fairness is advocated to justify policies of equalization of income levels across regions of the same country. Normative welfare economic theories maintain that the central government should carry out these policies as decentralization would exacerbate regional income gaps. These theories neglect that market forces too may produce convergence of regional incomes; their interplay with fiscal equalization policies has not been examined thoroughly. Using data from a highly centralized country (Italy) and a highly decentralized one (the U. S.) the analysis demonstrates that fiscal policies can forestall convergence driven by market forces and that decentralization can be associated with the choice of fiscal policies compatible with market-induced convergence of regional incomes.
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Dates et versions

halshs-00908634 , version 1 (25-11-2013)

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  • HAL Id : halshs-00908634 , version 1

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Fabio Padovano. Fairness and decentralization : a tale of two countries. Review of Institution and Economics, 2012, 11, pp.157-193. ⟨halshs-00908634⟩
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