caa a22 4500 606210210 CHVBK 20210128101032.0 cr unu---uuuuu 210128e20151101xx s 000 0 eng 10.1007/s10101-015-0169-6 doi (NATIONALLICENCE)springer-10.1007/s10101-015-0169-6 Flamand Sabine Departament d'Economia and CREIP, Universitat Rovira i Virgili, Tarragona, Spain aut Interregional transfers, group loyalty and the decentralization of redistribution [Elektronische Daten] [Sabine Flamand] We study the relative merits of centralized and decentralized redistribution in a political economy context assuming cross-regional heterogeneity in average income and identity. While centralizing redistribution allows to pool and redistribute resources at the country level, it may decrease the degree of solidarity in the society as a result of group loyalty. We show that total welfare maximization is closely linked to the minimization of income inequality within and between regions. Analyzing separately two particular cases under direct democracy—no interregional inequality and no group loyalty—we stress the existence of a scope effect and a pooling effect of centralized redistribution, respectively. In both cases, centralization welfare-dominates decentralization, from which it follows that the rationale for decentralizing redistribution only arises when the two sources of cross-regional heterogeneity interact. Springer-Verlag Berlin Heidelberg, 2015 Redistribution nationallicence Decentralization nationallicence Group loyalty nationallicence Inequality nationallicence Identity nationallicence Economics of Governance Springer Berlin Heidelberg 16/4(2015-11-01), 307-330 1435-6104 16:4<307 2015 16 10101 https://doi.org/10.1007/s10101-015-0169-6 text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s10101-015-0169-6 text/html Onlinezugriff via DOI NATIONALLICENCE 100 1- Flamand Sabine Departament d'Economia and CREIP, Universitat Rovira i Virgili, Tarragona, Spain aut NATIONALLICENCE 773 0- Economics of Governance Springer Berlin Heidelberg 16/4(2015-11-01), 307-330 1435-6104 16:4<307 2015 16 10101