Title The art of making everybody happy : how to prevent a secession / Michel Le Breton and Shlomo Weber

Published [Washington, D.C.] : International Monetary Fund, Fiscal Affairs Dept., ©2001

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Description 1 online resource (37 pages) Series IMF working paper ; WP/01/176 IMF working paper ; WP/01/176. Summary In this paper we consider a model of the country with heterogeneous population and examine compensation schemes that may prevent a threat of secession by dissatisfied regions. We show that horizontal imbalances are combatable with secession-proof compensation schemes that entail a degree of partial equalization: the disadvantageous regions should be subsidized but the burden on advantageous regions should not be too excessive. In the case of uniform distribution, we establish the 50-percent compensation rule for disadvantageous regions. Thus, we argue for a limited gap reduction between advantageous and disadvantageous regions and show that neither laissez faire nor Rawlsian allocation is secession-proof Bibliography Includes bibliographical references (pages 35-37) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Transfer payments -- Econometric models Expenditures, Public -- Econometric models Central-local government relations -- Econometric models Equality -- Econometric models Secession -- Econometric models Central-local government relations -- Economic aspects -- Econometric models Secession -- Economic aspects -- Econometric models Equality -- Econometric models Expenditures, Public -- Econometric models Transfer payments -- Econometric models Form Electronic book Author Weber, Shlomo International Monetary Fund. Middle Eastern Department. ISBN 1282026593 9781282026599 1451858817 9781451858815

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