Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 5, 2015 erstellt
Description:
In this study, we argue that the rules set by a central government to allocate interregional equalization grants may induce richer regions to ask for devolution, even when centralized provision is more efficient. We model a local public good with spillovers in a framework in which devolution is socially inefficient. Nevertheless, we show that the decentralized solution may be preferred by the richer regions if it implies a reduction in solidarity. We define a threshold for regional income disparity above which claims for more devolution may be driven by a reduction in solidarity. Finally, the relative strength of this effect is computed for a sample of countries