Theoretical analysis of equalization and spatial location efficiency
This paper shows that regional economies, such as federations or unitary countries with sub-national governments, may need a system of optimal inter-regional transfers to correct for various types of externalities related to factor mobility and location decisions. It is then argued that equalization...
| Main Author: | |
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| Format: | Journal Article |
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Routledge
2009
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| Online Access: | http://hdl.handle.net/20.500.11937/22261 |
| _version_ | 1848750821146099712 |
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| author | Petchey, Jeffrey |
| author_facet | Petchey, Jeffrey |
| author_sort | Petchey, Jeffrey |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | This paper shows that regional economies, such as federations or unitary countries with sub-national governments, may need a system of optimal inter-regional transfers to correct for various types of externalities related to factor mobility and location decisions. It is then argued that equalization schemes that take account of the differing expenditure and revenue needs of regions create a pattern of inter-regional transfers of income, but that they are inconsistent with what is required for spatial efficiency. Therefore, equalization is incompatible with the efficient spatial allocation of mobile factors of production. It is also shown that regions have an incentive to act strategically over equalization and distort their provision of local public goods. |
| first_indexed | 2025-11-14T07:42:55Z |
| format | Journal Article |
| id | curtin-20.500.11937-22261 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T07:42:55Z |
| publishDate | 2009 |
| publisher | Routledge |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-222612017-09-13T13:51:03Z Theoretical analysis of equalization and spatial location efficiency Petchey, Jeffrey This paper shows that regional economies, such as federations or unitary countries with sub-national governments, may need a system of optimal inter-regional transfers to correct for various types of externalities related to factor mobility and location decisions. It is then argued that equalization schemes that take account of the differing expenditure and revenue needs of regions create a pattern of inter-regional transfers of income, but that they are inconsistent with what is required for spatial efficiency. Therefore, equalization is incompatible with the efficient spatial allocation of mobile factors of production. It is also shown that regions have an incentive to act strategically over equalization and distort their provision of local public goods. 2009 Journal Article http://hdl.handle.net/20.500.11937/22261 10.1080/00343400801969500 Routledge restricted |
| spellingShingle | Petchey, Jeffrey Theoretical analysis of equalization and spatial location efficiency |
| title | Theoretical analysis of equalization and spatial location efficiency |
| title_full | Theoretical analysis of equalization and spatial location efficiency |
| title_fullStr | Theoretical analysis of equalization and spatial location efficiency |
| title_full_unstemmed | Theoretical analysis of equalization and spatial location efficiency |
| title_short | Theoretical analysis of equalization and spatial location efficiency |
| title_sort | theoretical analysis of equalization and spatial location efficiency |
| url | http://hdl.handle.net/20.500.11937/22261 |