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Federalism, distributive politics and representative democracy

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  • Guillaume Cheikbossian

Abstract

We analyze federal systems of government in which local public policies are financed by general taxation. In a decentralized political system there is, in each region, a vote to elect a local representative while in a centralized political system a single representative is elected by a federal vote. It is shown that under decentralization, voters strategically elect liberal representatives so as to nullify any element of cooperation between representatives in the decision-making stage. Thus, there is a trade-off between the budgetary externality and a “policy closer to the people”, but the democratic choice is biased towards decentralization. Copyright Springer-Verlag Berlin Heidelberg 2000

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Bibliographic Info

Article provided by Springer in its journal Economics of Governance.

Volume (Year): 1 (2000)
Issue (Month): 2 (07)
Pages: 105-122

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Handle: RePEc:spr:ecogov:v:1:y:2000:i:2:p:105-122

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Related research

Keywords: JEL Classification:H30; H72; H73; Key words:Federalism; Distributive Politics; Strategic Voting; Decentralization; Local Public Goods;

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Cited by:
  1. 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.
  2. Oliver Lorz & Gerald Willmann, 2008. "Enlargement versus Deepening: The Trade-off Facing Economic Unions," CESifo Working Paper Series 2455, CESifo Group Munich.
  3. R Dur & H.J. Roelfsema, 2004. "Why does centralisation fail to internalise policy externalities?," Working Papers 04-09, Utrecht School of Economics.
  4. 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.
  5. Per G. Fredriksson & Xenia Matschke & Jenny Minier, 2008. "Environmental Policy in Majoritarian Systems," Working papers 2008-01, University of Connecticut, Department of Economics, revised Sep 2009.
  6. Peter Tuchyòa & Martin Gregor, 2005. "Centralization Trade-off with Non-Uniform Taxes," Working Papers IES 81, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised 2005.
  7. 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.
  8. Toke S. Aidt & Jayasri Dutta, 2010. "Fiscal federalism and electoral accountability," Working Papers 2010/11, Institut d'Economia de Barcelona (IEB).
  9. 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.
  10. Julio, Paulo & Peralta, Susana, 2008. "Endogenous spillovers in the trade-off between centralization and decentralization," FEUNL Working Paper Series wp538, Universidade Nova de Lisboa, Faculdade de Economia.

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