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In Flanders’ Fields the Transfers Grow

Equalization policies now intensify calls for separatism in Belgium.
Published on April 14, 2004
Oliver Doms
Latest News | Backgrounder | Equalization

Executive Summary

  • 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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