Template-Type:ReDIF-Paper 1.0
Title: A Positive Theory of Interregional Redistribution and Constitutional Choice
Author-Name: Hansen, N.  
Author-Name: Kessler, A.S.
Author-Postal: Anke S. Kessler
	Department of Economics,
	Wirtschaftspolitische Abt.
	University of Bonn
	Adenauerallee 24-42
	53113 Bonn
	Germany
Author-Phone: +49 228 73 9246
Author-Homepage: 
Classification-JEL: H71, H73
Keywords: Interregional Transfers, Fiscal Federalism,Redistribution, Migration
Abstract: The paper studies the effects and the determinants of interregional
	redistribution in a federation of jurisdictions among which households are mobile.
	Each jurisdiction controls a local redistributive policy that is democratically chosen
	by its residents. Paradoxical consequences of interjurisdictional transfers
	arise. If regions are self sufficient, they necessarily
	converge with respect to policies and average
	incomes. Horizontal transfers between jurisdictions, in contrast, lead to the divergence
	of regional policies and per capita
	incomes. Because interregional transfer schemes prevent interregional equality,
	however, they also allow for more interpersonal equality among
	the inhabitants of each region. For this reason, the voting population may in a decision
	over the fiscal constitution deliberately implement such a
	transfer scheme to foster regional divergence.
Length:   pages
Creation-Date: 1999-09
Revision-Date: 
Handle: RePEc:bon:bonsfa:543