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Federal subsidization of state expenditure to reduce political budget cycles
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
2017 (English)In: International Tax and Public Finance, ISSN 0927-5940, E-ISSN 1573-6970, Vol. 24, no 3, 536-545 p.Article in journal (Refereed) Published
Abstract [en]

In this note, we analyze whether a federal transfer system can be designed to increase welfare when state governments create political budget cycles. The results show how the federal government can counteract the welfare costs of these cycles, without hindering politicians from signaling their type, by announcing a transfer scheme to subsidize expenditures that voters do not consider when voting.

Place, publisher, year, edition, pages
2017. Vol. 24, no 3, 536-545 p.
Keyword [en]
Political economy, Intergovernmental transfer, Budget cycle
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-120775DOI: 10.1007/s10797-016-9404-5ISI: 000400197100008OAI: oai:DiVA.org:umu-120775DiVA: diva2:929954
Funder
Riksbankens Jubileumsfond, RS10-1319:1
Available from: 2016-05-20 Created: 2016-05-20 Last updated: 2017-07-30

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Aronsson, ThomasGranlund, David
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CiteExportLink to record
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Citation style
  • apa
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