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Rent-seeking, spillovers and the benefits of decentralization

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  • Cheikbossian, Guillaume

Abstract

In the presence of spillovers, decentralized provision of local public goods may lead to a higher surplus than centralized provision even though localities have identical preferences. Indeed, free-riding costs associated to decentralization can be lower than the costs of rent-seeking and influence activities under centralization. Actually, centralization yields a higher level of regional surplus only if both the spillover effect from local public spending is sufficiently large and the elasticity of the influence function is sufficiently small.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 63 (2008)
Issue (Month): 1 (January)
Pages: 217-228

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Handle: RePEc:eee:juecon:v:63:y:2008:i:1:p:217-228

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Web page: http://www.elsevier.com/locate/inca/622905

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Keywords: (De)centralization Local public goods Rent-seeking Spillovers;

References

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Citations

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Cited by:
  1. Martin Gregor, 2013. "Modeling positive inter-jurisdictional public spending spillovers," EcoMod2013, EcoMod 5193, EcoMod.
  2. Sebastian Kessing, 2009. "Federalism and Accountability with Distorted Election Choices," CESifo Working Paper Series, CESifo Group Munich 2789, CESifo Group Munich.
  3. Gil S Epstein & Yosef Mealem, 2012. "Cooperation and Effort in Group Contests," Economics Bulletin, AccessEcon, vol. 32(1), pages 624-638.
  4. Amihai Glazer & Stef Proost, 2010. "Reducing Rent Seeking by Providing Wide Public Service," Working Papers, University of California-Irvine, Department of Economics 101106, University of California-Irvine, Department of Economics.
  5. Fredriksson, Per G. & Matschke, Xenia & Minier, Jenny, 2010. "Environmental policy in majoritarian systems," Journal of Environmental Economics and Management, Elsevier, vol. 59(2), pages 177-191, March.
  6. Janeba, Eckhard & Wilson, John Douglas, 2011. "Optimal fiscal federalism in the presence of tax competition," Journal of Public Economics, Elsevier, Elsevier, vol. 95(11), pages 1302-1311.
  7. Paulo Arvate & Vladimir Ponczek, 2008. "Municipality secession, voter’s preference and persistence of power," Working Papers, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto 08_07, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.
  8. Oliver Lorz & Gerald Willmann, 2013. "Size versus scope: on the trade-off facing economic unions," International Tax and Public Finance, Springer, Springer, vol. 20(2), pages 247-267, April.
  9. Martin Gregor & Lenka Stastna, 2012. "The decentralization tradeoff for complementary spillovers," Review of Economic Design, Springer, Springer, vol. 16(1), pages 41-69, March.

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