Table 4 Local subsidy in case of devolution with a matching grant
From: Devolution and grant-in-aid design for the provision of impure public goods
LG behaviour | Actual local subsidy | Subsidy estimated by CG |
|---|---|---|
FC | \(\theta z_j (1+k)-p(1-\rho _{j})\) | \(\theta z (1+k)-p(1-\rho _{j})\) |
PC | \(z_j \theta -p\frac{1-\rho _{j}}{2}\) | \(z \theta -p\frac{1-\rho _{j}}{2}\) |
FR | \(z_j \theta\) | \(z \theta\) |