Voting, Lobbying, And The Decentralization Theorem
AbstractThis paper revisits the well-known fiscal "Decentralization Theorem" by relaxing the role of the assumption that governments are benevolent, while retaining the assumption of policy uniformity. If, instead, decisions are made by majority voting, the theorem fails. Specifically, (i) centralization can welfare-dominate decentralization even if there are no externalities and regions are heterogeneous and (ii) decentralization can welfare-dominate centralization even if there are positive externalities and regions are homogeneous. Similar results are obtained if a benevolent government is subject to lobbying. Hence, the Decentralization Theorem is not robust to relatively minor deviations away from the benchmark of a purely benevolent government. Copyright 2008 The Author. Journal compilation 2008 Blackwell Publishing Ltd.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal Economics & Politics.
Volume (Year): 20 (2008)
Issue (Month): 3 (November)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985
Other versions of this item:
- Ben Lockwood, 2007. "Voting, Lobbying and the Decentralization Theorem," Economics Working Papers ECO2007/06, European University Institute.
- Lockwood, Ben, 2007. "Voting, Lobbying, and the Decentralization Theorem," The Warwick Economics Research Paper Series (TWERPS) 798, University of Warwick, Department of Economics.
- Benjamin Lockwood, 2007. "Voting, Lobbying, and the Decentralization Theorem," CESifo Working Paper Series 2117, CESifo Group Munich.
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
- H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Redoano, Michela, 2003.
"Does Centralisation Affect The Number And Size Of Lobbies?,"
The Warwick Economics Research Paper Series (TWERPS)
674, University of Warwick, Department of Economics.
- Michela Redoano, 2010. "Does Centralization Affect the Number and Size of Lobbies?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(3), pages 407-435, 06.
- Michela Redoano, 2007. "Does Centralization Affect the Number and Size of Lobbies?," CESifo Working Paper Series 1968, CESifo Group Munich.
- Alberto Alesina & Ignazio Angeloni & Federico Etro, 2001.
"The Political Economy of International Unions,"
NBER Working Papers
8645, National Bureau of Economic Research, Inc.
- Alesina, Alberto F & Angeloni, Ignazio & Etro, Federico, 2001. "The Political Economy of International Unions," CEPR Discussion Papers 3117, C.E.P.R. Discussion Papers.
- Alberto Alesina & Ignazio Angeloni & Federico Etro, 2001. "The Political Economy of International Unions," Harvard Institute of Economic Research Working Papers 1939, Harvard - Institute of Economic Research.
- Alesina, Alberto & Spolaore, Enrico, 1997.
"On the Number and Size of Nations,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(4), pages 1027-56, November.
- Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
- Inga Hillesheim, 2012. "Relative consumption and majority voting: supplementing Oates’ “Decentralization Theorem”," Journal of Economics, Springer, vol. 105(1), pages 29-43, January.
- Toke Aidt & Jayasri Dutta, 2010.
"Fiscal Federalism and Electoral Accountability,"
CESifo Working Paper Series
3022, CESifo Group Munich.
- Toke S. Aidt & Jayasri Dutta, 2010. "Fiscal federalism and electoral accountability," Working Papers 2010/11, Institut d'Economia de Barcelona (IEB).
- Aidt, T. & Dutta, J., 2010. "Fiscal Federalism and Electoral Accountability," Cambridge Working Papers in Economics 1021, Faculty of Economics, University of Cambridge.
- Martin Gregor & Lenka Šastná, 2011.
"The Decentralization Tradeoff for Complementary Spillovers,"
Working Papers IES
2011/13, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2011.
- Martin Gregor & Lenka Stastna, 2012. "The decentralization tradeoff for complementary spillovers," Review of Economic Design, Springer, vol. 16(1), pages 41-69, March.
- Ruta, Michele, 2009. "Political constraints to growth in an economic union," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 989-997, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.