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On the Size and Determinants of Inter-regional Redistribution in European Countries over the Period 1995-2009

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Abstract
The aim of this paper is to analyse cross-country differences in the degree of inter-regional redistribution achieved by means of taxes and expenditures in 21 European countries over the period 1995-2009. We rely on a standard approach based on the observation and comparison of both primary and disposable household income at regional scale. Once the redistributive effect in each country is quantified, we try to explain the drivers of cross-country time-series differences. According to our estimates, cross-national standard deviation is significant and much higher than time variation. Secondly, inter-regional redistribution is strongly and positively related to personal redistribution by means of taxes and social benefits in cash; and is negatively related to both the extent of regional disparities in primary income and to the degree of political and fiscal decentralization.

Suggested Citation

  • Santiago Lago-Peñas & Albino Prada & Alberto Vaquero, 2013. "On the Size and Determinants of Inter-regional Redistribution in European Countries over the Period 1995-2009," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1304, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    • Handle: RePEc:ays:ispwps:paper1304
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    Cited by:

    1. Jose Villaverde & Adolfo Maza & María Hierro, 2014. "The Effects of Interpersonal Fiscal Redistribution on Provincial Growth and Convergence in Spain," Hacienda Pública Española / Review of Public Economics, IEF, vol. 209(2), pages 151-170, June.

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    More about this item

    Keywords

    Inter-regional redistribution; regional fiscal imbalance; European Union.;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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