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In this study, we argue that the rules set by a central government to allocate interregional equalization grants may induce richer regions to ask for devolution, even when centralized provision is more ecient. We model a local public good with spillovers in a framework in which devolution is socially inecient. Nevertheless, we show that the decentralized solution may be preferred by the richer regions if it implies a reduction in solidarity. We dene a threshold for regional income disparitydoi:10.2139/ssrn.2669340 fatcat:th5prm4zkrbcxjdlw6fcwpv5je