We consider the interaction between redistributive politics at central
and local levels in a federal system, and characterize the factors in
fluencing success in redistributive politics in both federal and unita
ry systems. We examine how the political characteristics of different
states and groups give them better or worse outcomes in a federal syst
em as opposed to a unitary system. We examine possibilities of multipl
e equilibria with divided government between the two layers. We analyz
e the choice between block grants and matching grants. We also examine
the impact of federalism on the incentives for geographic mobility. (
C) 1998 Elsevier Science S.A.