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The Art of Making Everybody Happy: How to Prevent a Secession

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Author Info
Michel Le Breton (International Monetary Fund)
Shlomo Weber (International Monetary Fund)
Abstract

In this paper we examine compensation schemes that prevent a threat of secession by any of a country's regions. We prove that, under quite general assumptions on the distribution of citizens' preferences, there exist transfer schemes that are secession-proof. Moreover, we show that these compensation schemes entail a degree of partial equalization among regions: the gap between advantaged regions and disadvantaged regions has to be reduced but it should never be completely eliminated. We demonstrate that in the case of a uniform distribution of the nation's citizens, the secession-proof conditions generate the 50 percent compensation rule for disadvantaged regions. Copyright 2003, International Monetary Fund

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Publisher Info
Article provided by Palgrave Macmillan Journals in its journal IMF Staff Papers.

Volume (Year): 50 (2003)
Issue (Month): 3 ()
Pages: 4
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Handle: RePEc:pal:imfstp:v:50:y:2003:i:3:p:4

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Find related papers by JEL classification:
D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

Cited by:
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  1. Anna Bogomolnaia & Michel Le Breton & Alexei Savvateev & Shlomo Wever, 2005. "The Egalitarian sharing rule in provision of public goods," Economics Bulletin, Economics Bulletin, vol. 8(11), pages 1-5. [Downloadable!]
  2. Robert Dur & Klaas Staal, 2006. "Local Public Good Provision, Municipal Consolidation, and National Transfers," Discussion Papers 86, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
    Other versions:
  3. Dreze, Jacques & Le Breton, Michel & Savvateev, Alexei & Weber, Shlomo, 2006. "0.19% Subsidy-Free Spatial Pricing," IDEI Working Papers 423, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  4. Haimanko, Ori & Le Breton, Michel & Weber, Shlomo, 2005. "The Stability Threshold and Two Facts of Polarization," CEPR Discussion Papers 5098, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  5. Anna, BOGOMOLNAIA & Michel, LE BRETON & Alexei, SAVVATEEV & Sholmo, WEBER, 2006. "Heterogeneity gap in stable juridiction structures," Discussion Papers (ECON - Département des Sciences Economiques) 2006019, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
  6. Klaus Abbink & Jordi Brandts, 2007. "Political Autonomy and Independence: Theory and Experimental Evidence," UFAE and IAE Working Papers 689.07, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC). [Downloadable!]
  7. Alexei Savvateev & Jacques Drèze & Michel Le Breton & Shlomo Weber, 2007. "“Almost” Subsidy-free Spatial Pricing in a Multi-dimensional Setting," Working Papers 2007.68, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  8. Dreze, Jacques & Le Breton, Michel & Weber, Shlomo, 2006. "Secession-Proofness in Large Heterogeneous Societies," IDEI Working Papers 410, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  9. De Donder, Philippe & Le Breton, Michel & Peluso, Eugenio, 2009. "On the (Sequential) Majority Choice of Public Good Size and Location," CEPR Discussion Papers 7223, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  10. LE BRETON, Michel & WEBER, Schlomo & DREZE, Jacques, 2004. "The Rawlsian principle and secession-proofness in large heterogeneous societies," CORE Discussion Papers 2004061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  11. Dreze, Jacques & Le Breton, Michel & Weber, Shlomo, 2004. "The Rawslian Principle and Secession-Proofness in Large Heterogeneous Societies," IDEI Working Papers 283, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  12. Haimanko, Ori & Le Breton, Michel & Weber, Shlomo, 2005. "The Stability Threshold and Two Facets of Polarization," IDEI Working Papers 366, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  13. Dreze, Jacques & Le Breton, Michel & Weber, Shlomo, 2006. "Rawlsian Pricing of Access to Public Facilities: A Unidimensional Illustration," IDEI Working Papers 409, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
    Other versions:
  14. HAIMANKO, Ori & LE BRETON, Michel & WEBER, Shlomo, 2005. "The stability threshold and two facets of polarization," CORE Discussion Papers 2005035, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  15. Alexei Savvateev & Anna Bogomolnaia & Michel Le Breton & Shlomo Weber, 2005. "The Egalitarian Sharing Rule in Provision of Public Projects," Working Papers 2005.39, Fondazione Eni Enrico Mattei. [Downloadable!]
  16. Bogomolnaia, Anna & Le Breton, Michel & Savvateev, Alexei & Weber, Shlomo, 2006. "Stability under Unanimous Consent, Free Mobility and Core," IDEI Working Papers 413, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  17. BOGOMOLNAIA, Anna & LE BRETON, Michel & SAVVATEEV, Alexei & WEBER, Shlomo, 2006. "Heterogeneity gap in stable jurisdiction structures," CORE Discussion Papers 2006036, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  18. Klaus Abbink & Jordi Brandts, 2007. "Political Autonomy and Independence: Theory and Experimental Evidence," Labsi Experimental Economics Laboratory University of Siena 013, University of Siena. [Downloadable!]
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