Autoren:	Barbaro, Salvatore
Titel:	Price-shifting fungibility
Online-Publikationsdatum:	25-Feb-2022
Erscheinungsdatum:	2022
Sprache des Dokuments:	Englisch
Zusammenfassung/Abstract:	Unconditional intergovernmental grants are popular with economists but increasingly rarely observed in practice. Conversely, earmarking grants became a common form of the centres’ support to states in federalist countries, though they are seriously flawed by welfare loss induced by the intended reallocation of states’ provision of goods and services. Conditional grants bring states’ governments a dilemma: intergovernmental grants increase states’ revenues and enhance welfare, but the revenue gain is paid with amendments on the expenditure side, which harms welfare. We introduce the notion of price-shifting fungibility. It describes the effect of grant-receiving states minimizing the distortionary impact of conditional grants by lowering the prices or quality of the targeted good. By reducing the expenditure for the subsidized good, states create financial leeway to promote goods and services other than the targeted interest. By doing so, they can compensate for the welfare loss caused by conditional grants. We provide a simple theoretical model and some empirical evidence.
DDC-Sachgruppe:	320 Politik 320 Political science 330 Wirtschaft 330 Economics
Veröffentlichende Institution:	Johannes Gutenberg-Universität Mainz
Organisationseinheit:	FB 03 Rechts- und Wirtschaftswissenschaften
Veröffentlichungsort:	Mainz
ROR:	https://ror.org/023b0x485
DOI:	http://doi.org/10.25358/openscience-6790
Version:	Published version
Publikationstyp:	Zeitschriftenaufsatz
Weitere Angaben zur Dokumentart:	Scientific article
Nutzungsrechte:	CC BY
Informationen zu den Nutzungsrechten:	https://creativecommons.org/licenses/by/4.0/
Zeitschrift:	Regional studies, regional science 9 1
Seitenzahl oder Artikelnummer:	93 109
Verlag:	Taylor & Francis
Verlagsort:	London
Erscheinungsdatum:	2022
ISSN:	2168-1376
DOI der Originalveröffentlichung:	10.1080/21681376.2022.2030789
Enthalten in den Sammlungen:	JGU-Publikationen