The structure of political power and redistribution in economies with multiple governments
For economies with multiple governments, the effort and effectiveness of public redistribution policies depend on the political structure of the federation. The central government determines the degree of re distribution and the interaction between the preferences and wages of voters controlling, respectively, the central and sub-national governments determine whether income redistribution can be an effective tool to redistribute welfare. In this paper, we identify conditions in which the interaction between the central government and subnational governments lead to a Pareto superior allocation in the redistribution of income
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