Once a unitary country, Belgium has divided itself into federal regions.
The country has attempted to equalize conditions in the relatively more prosperous north and the relatively poorer south with a series of transfer programs.
The transfers are based on several factors, the most important being income tax revenues and social security levies.
Rather than spreading wealth, the perverse incentives contained in the transfers have encouraged politicians in Brussels and Wallonia to expand spending and regulatory programs.
The transfers have failed to equalize economic conditions; rather, they have widened gaps in standards of living and employment levels.
Once touted as a tool for reducing separatism, equalization has instead intensified the trend.
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