{"title":"If You Want Me to Stay, Pay: A Model of Asymmetric Federalism in Centralised Countries","authors":"P. Claeys, F. Martire","doi":"10.2139/ssrn.1304045","DOIUrl":null,"url":null,"abstract":"Highly centralised countries like Italy and Spain have devolved fiscal power to regions in an asymmetric way. Some well-off regions get transfers that turn them into net recipients of the fiscal system. We demonstrate in a political economy model of fiscal federalism that in centralised countries, side-payments are used to compensate regions that are set back by the fiscal system and can credibly threaten to secede. Compensation blocks political negotiation on alternative – more efficient – fiscal systems. We study two regions, Valle d’Aosta in Italy and País Vasco in Spain, as an example.","PeriodicalId":447069,"journal":{"name":"ERN: Structure","volume":"31 1","pages":"0"},"PeriodicalIF":0.0000,"publicationDate":"2015-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"ERN: Structure","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2139/ssrn.1304045","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 0
Abstract
Highly centralised countries like Italy and Spain have devolved fiscal power to regions in an asymmetric way. Some well-off regions get transfers that turn them into net recipients of the fiscal system. We demonstrate in a political economy model of fiscal federalism that in centralised countries, side-payments are used to compensate regions that are set back by the fiscal system and can credibly threaten to secede. Compensation blocks political negotiation on alternative – more efficient – fiscal systems. We study two regions, Valle d’Aosta in Italy and País Vasco in Spain, as an example.