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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

Related research

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

References

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  1. Alesina, Alberto F & Angeloni, Ignazio & Etro, Federico, 2003. "International Unions," CEPR Discussion Papers 3913, C.E.P.R. Discussion Papers.
  2. Torsten Persson & Guido Tabellini, . "Political Economics and Public Finance," Working Papers 149, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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Citations

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Cited by:
  1. Oliver Lorz & Gerald Willmann, 2013. "Size versus scope: on the trade-off facing economic unions," International Tax and Public Finance, Springer, vol. 20(2), pages 247-267, April.
  2. Martin Gregor & Lenka Stastna, 2012. "The decentralization tradeoff for complementary spillovers," Review of Economic Design, Springer, vol. 16(1), pages 41-69, March.
  3. Kessing, Sebastian G., 2010. "Federalism and accountability with distorted election choices," Journal of Urban Economics, Elsevier, vol. 67(2), pages 239-247, March.
  4. Martin Gregor, 2012. "Modeling positive inter-jurisdictional public spending spillovers," Working Papers IES 2012/16, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Jun 2012.
  5. Janeba, Eckhard & Wilson, John Douglas, 2011. "Optimal fiscal federalism in the presence of tax competition," Journal of Public Economics, Elsevier, vol. 95(11), pages 1302-1311.
  6. Amihai Glazer & Stef Proost, 2010. "Reducing Rent Seeking by Providing Wide Public Service," Working Papers 101106, University of California-Irvine, Department of Economics.
  7. Gil S. Epstein & Yosef Mealem, 2011. "Cooperation and Effort in Group Contests," Working Papers 2011-28, Department of Economics, Bar-Ilan University.
  8. 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.
  9. Paulo Arvate & Vladimir Ponczek, 2008. "Municipality secession, voter’s preference and persistence of power," Working Papers 08_07, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.

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