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The political economy of regionalism

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  • Goyal, Sanjeev
  • Staal, Klaas

Abstract

We examine the incentives of regions in a country to unite or to separate. We find that smaller regions have greater incentives to unite, relative to larger regions. We show, however, that on the whole, majority voting on separation and union generates excessive incentives to separate. This leads us to examine the scope of alternative political institutions and rules in overcoming the potential inefficiency. Our paper also provides a wide range of examples to illustrate the different institutions used in actual practice to resolve such problems.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 48 (2004)
Issue (Month): 3 (June)
Pages: 563-593

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Handle: RePEc:eee:eecrev:v:48:y:2004:i:3:p:563-593

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  12. Rubinfeld, Daniel L., 1987. "The economics of the local public sector," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 11, pages 571-645 Elsevier.
  13. Bewley, Truman F, 1981. "A Critique of Tiebout's Theory of Local Public Expenditures," Econometrica, Econometric Society, vol. 49(3), pages 713-40, May.
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