Efficient Revenue Sharing and Upper Level Governments: Theory and Application to Germany
Büttner T, Schwager R, Hauptmeier S (2011)
Publication Type: Journal article
Publication year: 2011
Journal
Publisher: Mohr Siebeck
Book Volume: 167
Pages Range: 647-667
URI: https://www.finanzwissenschaft.rw.fau.de/files/2020/02/Efficient_Revenue_Sharing.pdf
Abstract
This paper explores conditions under which revenue-sharing grants will achieve efficiency. We develop a general formulation of the state's decision problem of implementing a set of local policies. A theoretical analysis shows that if the state government pursues own policies and cannot levy lump-sum contributions from local jurisdictions, it will implement revenue-sharing grants that induce local governments to raise local tax rates. A subsequent empirical analysis of local tax policy in Germany suggests that attempts by state-level governments to extract fiscal resources fromlocal governments result in higher tax rates at the local level. ©2011 Mohr Siebeck.
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APA:
Büttner, T., Schwager, R., & Hauptmeier, S. (2011). Efficient Revenue Sharing and Upper Level Governments: Theory and Application to Germany. Journal of Institutional and Theoretical Economics - Zeitschrift für die gesamte Staatswissenschaft, 167, 647-667.
MLA:
Büttner, Thiess, Robert Schwager, and Sebastian Hauptmeier. "Efficient Revenue Sharing and Upper Level Governments: Theory and Application to Germany." Journal of Institutional and Theoretical Economics - Zeitschrift für die gesamte Staatswissenschaft 167 (2011): 647-667.
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