A structural approach for analyzing fiscal equalization
- Resource Type
- Authors
- Langørgen, Audun
- Source
- Subject
- Fiscal Capacity
ddc:330
Expenditure Needs
Structural Modeling
ComputingMilieux_LEGALASPECTSOFCOMPUTING
jel:H71
jel:H72
Fiscal Equalization
JEL classification: H72
H71
JEL classification: H71
Matematikk og Naturvitenskap: 400::Matematikk: 410::Statistikk: 412 [VDP]
H72
- Language
- English
Many countries apply cost-equalization and/or fiscal capacity equalization formulas to enable subnational governments to provide comparable service standards at comparable tax rates. This paper demonstrates how measures of expenditure needs and fiscal capacity can be derived from a structural model of local government spending and taxing behavior. The structural parameters are shown to provide the information required to implement equalization according to the principle of horizontal equity. Norwegian Ministry of Local Government and Regional Development