The compliance with the «principle of fiscal equivalence», i.e. the coincidence between the areas of the economic and the political jurisdiction, is a basic requirement for the efficient provision of public services by a local government. The mobility of people is an important factor preventing this requirement from being met and generating a serious case of externality: as a result of mobility, indeed, many people come to consume the services provided by a given local government (e.g. the central municipality of a metropolitan area), although they belong to other political jurisdictions, in which they are voters and taxpayers. From the distributional viewpoint this implies an additional burden on the budget of the municipality in question, and ultimately on the finances of its resident citizens. The idea of devising some way to prevent such burden from arising seems to deserve a great deal of attention. This paper tries firstly to provide an outline of the inefficiencies generated by the mobility of people in the framework of a decentralized state, and in the second place some suggestions about the use of the Italian local revenue schemes (taxes, public prices and grants) - both existing and envisaged in the current project of reform - to meet the demand for equalization arising from the distributional outcome of such inefficiencies.
Keywords: Fiscal federalism, mobility, equalization.
Jel Code: H23, H77