Size versus scope: on the trade-off facing economic unions
AbstractThis paper analyzes the relationship between the size of an economic union and the degree of policy centralization. We consider a political economy setting in which elected representatives bargain over the degree of centralization within the union. In our model, strategic delegation affects the identity of the representatives, and hence the equilibrium policy outcome. We show that the relationship between the extensive and the intensive margin of centralization may be non-monotonic: Up to a certain threshold a larger size implies deeper integration, whereas beyond that threshold centralization declines with further increases in size. We also show that freezing the level of centralization and associate memberships can mitigate this trade-off. Copyright Springer Science+Business Media, LLC 2013
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.
Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 20 (2013)
Issue (Month): 2 (April)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=102915
Fiscal federalism; Policy centralization; Political economy; D78; H77; H87;
Find related papers by JEL classification:
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
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.:
- Cremer, Jacques & Palfrey, Thomas R., .
"In or Out?: Centralization by Majority Vote,"
879, California Institute of Technology, Division of the Humanities and Social Sciences.
- Lorz, Jens Oliver & Willmann, Gerald, 2004.
"On the Endogenous Allocation of Decision Powers in Federal Structures,"
Center for European, Governance and Economic Development Research Discussion Papers
25, University of Goettingen, Department of Economics.
- Lorz, Oliver & Willmann, Gerald, 2005. "On the endogenous allocation of decision powers in federal structures," Journal of Urban Economics, Elsevier, vol. 57(2), pages 242-257, March.
- Oliver Lorz & Gerald Willmann, 2004. "On the Endogenous Allocation of Decision Powers in Federal Structures," Kiel Working Papers 1209, Kiel Institute for the World Economy.
- Alberto Alesina & Ignazio Angeloni & Federico Etro, 2003.
Harvard Institute of Economic Research Working Papers
2001, Harvard - Institute of Economic Research.
- Robert Dur & Hein Roelfsema, 2005.
"Why does centralisation fail to internalise policy externalities?,"
Springer, vol. 122(3), pages 395-416, March.
- Robert A.J. Dur & Hein J. Roelfsema, 2002. "Why does Centralisation fail to internalise Policy Externalities?," Tinbergen Institute Discussion Papers 02-056/3, Tinbergen Institute, revised 11 Nov 2003.
- R Dur & H.J. Roelfsema, 2004. "Why does centralisation fail to internalise policy externalities?," Working Papers 04-09, Utrecht School of Economics.
- Wolfgang Buchholz & Alexander Haupt & Wolfgang Peters, 2005. "International Environmental Agreements and Strategic Voting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(1), pages 175-195, 03.
- Hoyt, William H., 1991. "Property taxation, Nash equilibrium, and market power," Journal of Urban Economics, Elsevier, vol. 30(1), pages 123-131, July.
- 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.
- Grégoire Rota Graziosi, 2009.
"On the Strategic Use of Representative Democracy in International Agreements,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 11(2), pages 281-296, 04.
- Grégoire Rota-Graziosi, 2011. "On the strategic use of representative democracy in international agreements," Working Papers halshs-00562632, HAL.
- Grégoire ROTA-GRAZIOSI, 2006. "On the strategic use of representative democracy in international agreements," Working Papers 200624, CERDI.
- 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.
- Bård Harstad, 2007. "Harmonization and Side Payments in Political Cooperation," American Economic Review, American Economic Association, vol. 97(3), pages 871-889, June.
- Klaus Desmet & Michel Breton & Ignacio Ortuño-Ortín & Shlomo Weber, 2011.
"The stability and breakup of nations: a quantitative analysis,"
Journal of Economic Growth,
Springer, vol. 16(3), pages 183-213, September.
- Klaus Desmet & Michel Le Breton & Ignacio Ortuno-Ortin & Shlomo Weber, 2009. "The Stability and Breakup of Nations: A Quantitative Analysis," Vives discussion paper series 10, Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, Vives.
- Chari, V V & Jones, Larry E & Marimon, Ramon, 1997.
"The Economics of Split-Ticket Voting in Representative Democracies,"
American Economic Review,
American Economic Association, vol. 87(5), pages 957-76, December.
- V. V. Chari & Larry E. Jones & Ramon Marimon, 1997. "The economics of split-ticket voting in representative democracies," Working Papers 582, Federal Reserve Bank of Minneapolis.
- Gans, Joshua S. & Smart, Michael, 1996. "Majority voting with single-crossing preferences," Journal of Public Economics, Elsevier, vol. 59(2), pages 219-237, February.
- Segendorff, Bjorn, 1998. "Delegation and Threat in Bargaining," Games and Economic Behavior, Elsevier, vol. 23(2), pages 266-283, May.
- Crémer, Jacques & Palfrey, Thomas, 2000.
"Federal Mandates by Popular Demand,"
IDEI Working Papers
120, Institut d'Économie Industrielle (IDEI), Toulouse, revised 2001.
- Redoano, Michela & Scharf, Kimberley Ann, 2002.
"The Political Economy of Policy Centralization: Direct Versus Representative Democracy,"
CEPR Discussion Papers
3631, C.E.P.R. Discussion Papers.
- Redoano, Michela & Scharf, Kimberly A., 2004. "The political economy of policy centralization: direct versus representative democracy," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 799-817, March.
- Michela Redoano & Kimberley Ann Scharf, 2001. "The Political Economy of Policy Centralization: Direct Versus Representative Democracy," CESifo Working Paper Series 602, CESifo Group Munich.
- Torsten Persson & Guido Tabellini, 1990.
"The Politics of 1992: Fiscal Policy and European Integration,"
NBER Working Papers
3460, National Bureau of Economic Research, Inc.
- Persson, Torsten & Tabellini, Guido, 1992. "The Politics of 1992: Fiscal Policy and European Integration," Review of Economic Studies, Wiley Blackwell, vol. 59(4), pages 689-701, October.
- Persson, Torsten & Tabellini, Guido, 1991. "The Politics of 1992: Fiscal Policy and European Integration," CEPR Discussion Papers 501, C.E.P.R. Discussion Papers.
- Berglöf, Erik & Burkart, Mike & Friebel, Guido & Paltseva, Elena, 2008.
"Widening and Deepening: Reforming the European Union,"
CEPR Discussion Papers
6672, C.E.P.R. Discussion Papers.
- Erik Berglof & Mike Burkart & Guido Friebel & Elena Paltseva, 2008. "Widening and Deepening: Reforming the European Union," American Economic Review, American Economic Association, vol. 98(2), pages 133-37, May.
- Cheikbossian, Guillaume, 2008. "Rent-seeking, spillovers and the benefits of decentralization," Journal of Urban Economics, Elsevier, vol. 63(1), pages 217-228, January.
- Christina Schneider, 2007. "Enlargement processes and distributional conflicts: The politics of discriminatory membership in the European Union," Public Choice, Springer, vol. 132(1), pages 85-102, July.
- Gian Maria Milesi-Ferretti & Roberto Perotti & Massimo Rostagno, 2002.
"Electoral Systems And Public Spending,"
The Quarterly Journal of Economics,
MIT Press, vol. 117(2), pages 609-657, May.
- Harstad, Bård, 2010.
"Strategic delegation and voting rules,"
Journal of Public Economics,
Elsevier, vol. 94(1-2), pages 102-113, February.
- Michele Ruta, 2005. "Economic Theories of Political (Dis)integration," Journal of Economic Surveys, Wiley Blackwell, vol. 19(1), pages 1-21, 02.
- Wilson, John Douglas & Janeba, Eckhard, 2005.
"Decentralization and international tax competition,"
Journal of Public Economics,
Elsevier, vol. 89(7), pages 1211-1229, July.
- John Wilson & Eckhard Janeba, 2003. "Decentralization and International Tax Competition," CESifo Working Paper Series 854, CESifo Group Munich.
- Guillaume Cheikbossian, 2000. "Federalism, distributive politics and representative democracy," Economics of Governance, Springer, vol. 1(2), pages 105-122, 07.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.