Equalization

James Buchanan was awarded the 1986 Nobel Prize in economics for his work on the public choice theory of economics. As his early writings were highly influential in the design of equalization programmes such as Canada’s, Buchanan is known as one of the “fathers of equalization”. His more recent work has highlighted the possibility that equalization programmes can be captured and destroyed by politics and bad design. He spoke at a conference on equalization co-sponsored by the Montreal Economic Institute, the Atlantic Institute for Market Studies, and the Frontier Centre for Public Policy in Montreal on October 25th, 2001. Following this conference he sat down for an interview to discuss his changed perspectives on equalization.

Nobel laureate James Buchanan took this opportunity to revisit his arguments of 50 years before. He said that he didn’t take enough account of how political interference with the operations of such programmes can outweigh the good intentions behind them.

AIMS author addresses Senate on equalization On 24 October 2001, Kenneth J. Boessenkool author of the AIMS report, “Taking of the Shackles: Equalization and the Development of Nonrenewable Resources in Atlantic Canada”, delivered a presentation to the Senate National Finance Committee. In it he outlined ten reasons to remove nonrenewable resources from Equalization. In summary, he argued that such a change would mean little to the federal government’s bottom line; it would continue to protect the federal balance sheet from the vagaries of the price of nonrenewable resources, particularly oil and gas; and it means a substantial simplification of the program - an intergovernmental hat trick not often seen in the arcane world of Canada’s intergovernmental relations.