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Fiscal Imbalances and Fiscal Effort of Local Governments

Giuseppe Di Liddo, Ernesto Longobardi and Francesco Porcelli

Abstract

This paper deals with an important issue in the field of fiscal federalism, the effect of fiscal imbalances on the behaviour of sub-central governments. We provide a simple theoretical model that considers the effect of both forms of fiscal imbalances on the fiscal effort of local governments.

Acknowledgement

The authors would like to thank for their helpful suggestions: Michele Giuranno, Agnese Sacchi, Raffaella Santolini, the two anonymous referees, and the participants at the XXVII Public Economics Meeting of the Italian Public Economic Society (SIEP) and the 56th Conference of the Italian Economic Society (SIE).

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Published Online: 2019-05-14

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