Federalismo fiscal y redistribución regional óptima
ISSN: 2341-2356
Year of publication: 1997
Issue: 18
Pages: 1-37
Type: Working paper
More publications in: Documentos de Trabajo (ICAE)
Abstract
The treaty for European Monetary Unification entails a complete 1088 of monetary paliey autonorny for individual couotdes. Therefore, it is c1aimed that centralization of some government tasks requires sorne risk-sharing scheme among European states, such as a federal tax-transfer. In this paper we anaIyse two different mechanisrns: a system of intergovernmental transfers versus a system which redistributes to and from individual citizens. We found that transfers do not depend on the mechanism employed nor on the degree of centralizatian. We present sirnulation results for the Spanish and German economies where we find out that the ex-ante distribution rule of taxes is important for choosing the compensatían mechanism and degree of centralization, when this decision is based on the comparison of different welfare levels attainable in each scenario.