A theoretical model of nations, regions and fiscal integration

This paper analyzes how the incentives of regions differ from those of nations when choosing a supranational fiscal arrangement. Two types of fiscal arrangements are studied: a Union of nations and a Federation of nations. Under the Union, there is full fiscal integration, and under the Federation,...

Full description

Saved in:
Bibliographic Details
Published in:Regional science and urban economics 2006, Vol.36 (1), p.132-157
Main Authors: Ortuño-Ortín, Ignacio, Sempere, Jaume
Format: Article
Language:English
Subjects:
Comparative studies
Economic incentives
Economic models
Federalism
Fiscal coinsurance
Fiscal federalism
Fiscal policy
Incentives
International taxation
Migration
Monetary unions
Nation state
Regional economics
Regional integration
State structure
Supranationalism
Tax incentives
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper analyzes how the incentives of regions differ from those of nations when choosing a supranational fiscal arrangement. Two types of fiscal arrangements are studied: a Union of nations and a Federation of nations. Under the Union, there is full fiscal integration, and under the Federation, there is only partial fiscal integration and partial insurance against local risks. We show that the claim that regions have stronger incentives than nations to form a supranational Union rather than a Federation might be true only in the case where regions have strong incentives to be part of a centralized nation.
ISSN:0166-0462
1879-2308
DOI:10.1016/j.regsciurbeco.2005.07.001