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Civil Conflict, Federalism and Strategic Delegation of Leadership

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  • Colin Jennings

    (Department of Economics, University of Strathclyde, colin.jennings @strath.ac.uk)

  • Hein Roelfsema

    (Utrecht School of Economics, Utrecht University, h.j.roelfesema@econ. uu.nl)

Abstract

This article analyzes negative externalities that policymakers in one region or group may impose upon the citizens of neighboring regions or groups. These externalities may be material, but they may also be psychological (in the form of envy). The latter form of externality may arise from the production of `conspicuous' public goods. As a result, decentralized provision of conspicuous public goods may be too high. Potentially, a centralized legislature may internalize negative externalities. However, in a model with strategic delegation, we argue that the median voter in each jurisdiction may anticipate a reduction in local public goods supply and delegate to a policymaker who cares more for public goods than she does herself. This last effect mitigates the expected benefits of policy centralization. The authors' theory is then applied to the setting of civil conflict, where they discuss electoral outcomes in Northern Ireland and Yugoslavia before and after significant institutional changes that affected the degree of centralization. These case studies provide support for the authors' theoretical predictions.

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Bibliographic Info

Article provided by Peace Research Institute Oslo in its journal Journal of Peace Research.

Volume (Year): 45 (2008)
Issue (Month): 4 (July)
Pages: 557-573

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Handle: RePEc:sae:joupea:v:45:y:2008:i:4:p:557-573

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Web page: http://www.prio.no/

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  12. R Dur & H.J. Roelfsema, 2004. "Why does centralisation fail to internalise policy externalities?," Working Papers 04-09, Utrecht School of Economics.
  13. Gali, Jordi, 1994. "Keeping Up with the Joneses: Consumption Externalities, Portfolio Choice, and Asset Prices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(1), pages 1-8, February.
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Cited by:
  1. Stefan Brandauer & Florian Englmaier, 2009. "A model of strategic delegation in contests between groups," Review of Economic Design, Springer, vol. 13(3), pages 205-232, September.
  2. R. Emre Aytimur & Aristotelis Boukouras & Robert Schwager, 2012. "The Citizen-Candidate Model with Imperfect Policy Control," CESifo Working Paper Series 3900, CESifo Group Munich.
  3. Jennings, Colin, 2008. "Intra-Group Competition and Inter-Group Conflict: An Application to Northern Ireland," SIRE Discussion Papers 2008-30, Scottish Institute for Research in Economics (SIRE).

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