Claims for devoluton may be driven by a reduction in regional income redistribution?

What is it about?

Claims for an increase in devolution have recently increased, but they may not be driven by efficiency. Most systems foresee equalisation grant that are related to local public expenditure. In this environment richer regions may simply ask for more devolution in order to control public expenditure and reduce grants in aid Our paper presents a model along these lines

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Why is it important?

Decentralisation in decision making is a very controversial issue. In Europe, calls for devolution within countries ( Flanders in Belgium, Catalan Region in Spain, Bavaria in Germany, and Lombardy in Italy) coexist with a drift toward centralization of some relevant functions, such as fiscal policies. In developing countries, decentralisation is often prioritised in political agendas even though its effects on economic growth and regional income disparities remain a controversial issue. Studying the causes for devolution is very important, especially in a context where the claims may not be driven by efficiency objectives