Scandinavian Working Papers in Economics
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Department of Economics, Uppsala University Working Paper Series, Uppsala Center for Fiscal Studies, Department of Economics, Uppsala University

No 2012:12:
Public Goods in a Voluntary Federal Union: Implications of a Participation Constraint

Thomas Aronsson (), Luca Micheletto () and Tomas Sjögren ()

Abstract: This paper re-examines the question of whether federal ex-post redistribution in terms of public funds leads to under-provision of public goods by adding the assumption that the member states are free to leave the economic federation. We show that federal ex-post redistribution leads to e¢ cient provision of local and federal public goods under certain conditions.

Keywords: Public goods; …scal federalism; ex-post redistribution; (follow links to similar papers)

JEL-Codes: D61; H41; H77; (follow links to similar papers)

7 pages, November 13, 2012

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This paper is published as:
Aronsson, Thomas, Luca Micheletto and Tomas Sjögren, (2014), 'A note on public goods in a decentralized fiscal union: Implications of a participation constraint', Journal of Urban Economics, Vol. 84, pages 1-8

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