Oates wallace an essay on fiscal federalism

To take one example, the efficient level of air quality in Los Angeles is surely much different from that in, say, Chicago. Osborne It is my sense that this is the primary thrust behind the current welfare reform.

Her remedy is a system of shared taxes under which the revenues from a new national value-added tax would be shared among the states.

It implies that the budgetary response to an intergovernmental transfer should be roughly the same as the response to an equal increase in private income in the community.

And there is no race to the bottom here. Source-based taxes, however, are often easier to administer and, in certain forms, tend to be more commonly used by state and local governments. Their claim is that the mobility of workers across state borders undoes efforts at redistribution-and does so very quickly.

It was this attraction of low wages and costs that ultimately induced economic movement to the South, bringing with it a new prosperity. But the proper goal of restructuring the public sector cannot simply be de- centralization.

The result is no redistribu- tion, only deadweight losses from inefficient locational decisions. In both cases, the basic argument stems from some fundamental constraints on lower level governments.

Such competition can involve regulatory as well as purely fiscal policies. From this perspective, Barry WeingastRonald McKinnon aand their colleagues have explored the insti- tutional structure of a system that prom- ises to provide a stable framework for a market system see also McKinnon and Nechyba and Qian and Weingast But there is more to the story.

In the United States, in contrast, equalizing grants from the fed- eral to state governments have never amounted to much. There exists a basic "information externality" in that states that adopt new and experimental policies generate valuable information for others.

In particular, there is a theoretical case for some poor relief at local levels Mark Paulyand the fact is that state and local govern- ments undertake a significant amount of redistributive activity.

For such grants, although transfering income from wealthy to poor on nuer- age, will inevitabl result in some income transfers from poor indivi 2uals who reside in wealthy juris- dictions to rich persons in generally poor areas.

They are often game-theo- retic models that produce Nash equilib- ria with suboptimal public outputs as the outcome. Moreover, some of the terminol- ogy is not very helpful.

More recently, Alice Rivlin has echoed these views in her "rethink- ing of U. An Essay on Fiscal Federalism 1. Such transfers are often based on an equalization formula that measures the "fiscal need" and "fiscal capacity" of each province, state, or lo- cality.

Intergovern- mental equalizing transfers require a somewhat different justification based on social values.

Theory of Fiscal Federalism: An Analysis

There is, in fact, consider- able evidence to indicate that state and local systems of taxes are typically more regressive than central taxation e. But in a federal system there is a further method for funds among the different levels of the public sector: They thus do not provide incentives for expansion at the margin.

The public sector in nearly all countries consists of several different levels.Search this site: Humanities.

Wallace E. Oates

Architecture and Environmental Design; Art History. A Festschrift, Environmental and public economics: essays in honor of Wallace E. Oates, was published in his honor inOates, Wallace E. Fiscal Federalism. New York: Harcourt Brace Jovanovich, According to WorldCat, the book is held in libraries Reprinted, The study has critically analysed the first generation theory and second generation theory of fiscal federalism.

Though the later approaches the problem of fiscal federalism from different perspective, it does not challenge but complements the former.

An Essay on Fiscal Federalism. Wallace E Oates. Abstract. This paper is a selective survey of fiscal federalism.

It begins with a brief review and some reflections on the traditional theory of. Oates wallace an essay on fiscal federalism Opinion essay writing services provided by professional academic writers. Assignment 1 the constitution unlike the innovation sparked by professional academic writers.

An Essay on Fiscal Federalism by Wallace E. Oates. Published in volume 37, issue 3, pages of Journal of Economic Literature, SeptemberAbstract: This .

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