Funding source and soft budget constraint
Résumé
This paper analyses the impact of funding source of the bailout on the softness of the regional budget constraint. We show that the funding source of the bailout has a considerable impact both on the credibility of the federal government's commitment and on the regional opportunistic behaviour. By choosing the adequate tax tool, the federal government turns out to be able to limit the soft budget constraint phenomenon.
Domaines
Economies et finances
Origine : Fichiers produits par l'(les) auteur(s)