'If you want me to stay, pay': a model of asymmetric federalism in centralised countries

Peter Claeys, Federico Martire

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

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 Pais Vasco in Spain, as an example.
Original languageEnglish
Pages (from-to)305-320
Number of pages16
JournalEnvironment and Planning C: Government and Policy
Volume33
Issue number2
DOIs
Publication statusPublished - 2015

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