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dc.contributor.authorNeyapti, B.en_US
dc.contributor.authorBulut-Cevik, Z. B.en_US
dc.date.available2015-07-28T12:01:46Z
dc.date.issued2014-08en_US
dc.identifier.issn0264-9993
dc.identifier.urihttp://hdl.handle.net/11693/12515en_US
dc.description.abstractThe expanding literature on fiscal decentralization (FD) emphasizes the role of institutional mechanisms for FD's welfare effects. We analyze the welfare effects of FD in case of a fiscal transfer mechanism that punishes inefficiency in tax collection and compensates for local income deficiency. In addition, a portion of transfers is earmarked for investment. Given a level of FD and these rules, the representative local government chooses its tax collection effort to maximize local utility. The solution of the model reveals that the stricter the redistributive rule, the higher are steady-state fiscal efficiency and welfare. While the effectiveness of the redistributive parameters increases with centralization of the revenue pool, it decreases with the tax rate. Both welfare and income distribution, on the other hand, improve with the degree of revenue centralization and the tax rate. Besides, fiscal efficiency and redistribution decrease with investment-earmarked transfers. © 2014 Elsevier B.V.en_US
dc.language.isoEnglishen_US
dc.source.titleEconomic Modellingen_US
dc.relation.isversionofhttp://dx.doi.org/10.1016/j.econmod.2014.05.034en_US
dc.subjectFiscal Efficiencyen_US
dc.subjectRedistributionen_US
dc.subjectTransfer Ruleen_US
dc.titleFiscal efficiency, redistribution and welfareen_US
dc.typeArticleen_US
dc.departmentDepartment of Economicsen_US
dc.citation.spage375en_US
dc.citation.epage382en_US
dc.citation.volumeNumber41en_US
dc.citation.issueNumberCen_US
dc.identifier.doi10.1016/j.econmod.2014.05.034en_US
dc.publisherElsevieren_US
dc.identifier.eissn1873-6122


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