Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 24/2004: Local autonomy and interregional equality

Alexander W. Cappelen () and Bertil Tungodden ()
Additional contact information
Alexander W. Cappelen: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Bertil Tungodden: Norwegian School of Economics and Business Administration and Chr. Michelsen, Postal: NHH, Helleveien 30, NO-5045 Bergen, Norway

Abstract: This paper shows how two important interregional transfer schemes,the foundation grant and the power equalization grant, can be seen as two different interpretations of equal opportunity ethics. It provides characterizations of both transfer schemes by the use of basic liberal egalitarian principles. Both the foundation grant and the power equalization grant scheme make use of specific reference levels. The paper also shows how reasonable requirements on the transfer schemes restrict the set of possible reference levels.

Keywords: transfer schemes; foundation grant; power equalization grant; liberal egalitarian principles

JEL-codes: E62

24 pages, November 24, 2004

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