Why So Much Centralization? A Model of Primitive Centripetal Accumulation
AbstractWith strong conceptual arguments in its favor, decentralization is a popular and growing policy trend across the world. And yet dozens of empirical studies have failed to find convincing evidence that past reforms have worked. This begs two questions: 1)Why does decentralization produce indifferent results? and 2) Why is there so much centralization in the first place? The paper develops a simple model of a legislature in which municipal representatives bargain with central government agents over the allocation of public resources. By locating central government in a particular geographic space ¿ the ¿capital¿ ¿ and invoking self-interest on the part of its residents, I can answer both questions. I introduce the concept of residual power, which underpins the model and determines the flow of resources to districts. There is so much centralization because residual power is located in the capital, whose residents directly benefit from weak local governments.
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 InfoPaper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers with number 43.
Date of creation: Jun 2004
Date of revision:
Contact details of provider:
Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp
Centralization; decentralization; local public goods; local government; municipal government; legislative bargaining; capture.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-02 (All new papers)
- NEP-CDM-2005-01-02 (Collective Decision-Making)
- NEP-GEO-2005-01-02 (Economic Geography)
- NEP-REG-2005-01-02 (Regulation)
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.:
- Timothy Besley & Stephen Coate, 1999.
"Centralized versus Decentralized Provision of Local Public Goods: A Political Economy Analysis,"
NBER Working Papers
7084, National Bureau of Economic Research, Inc.
- Besley, Timothy J. & Coate, Stephen, 2000. "Centralized versus Decentralized Provision of Local Public Goods: a Political Economy Analysis," CEPR Discussion Papers 2495, C.E.P.R. Discussion Papers.
- Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
- Pranab Bardhan & Dilip Mookherjee, 1998. "Expenditure Decentralization and the Delivery of Public Services in Developing Countries," Boston University - Institute for Economic Development 90, Boston University, Institute for Economic Development.
- Alesina, Alberto F & Roubini, Nouriel, 1990.
"Political Cycles in OECD Economies,"
CEPR Discussion Papers
470, C.E.P.R. Discussion Papers.
- Panizza, Ugo, 1999. "On the determinants of fiscal centralization: Theory and evidence," Journal of Public Economics, Elsevier, vol. 74(1), pages 97-139, October.
- John Joseph Wallis & Wallace E. Oates, 1988. "Decentralization in the Public Sector: An Empirical Study of State and Local Government," NBER Chapters, in: Fiscal Federalism: Quantitative Studies, pages 5-32 National Bureau of Economic Research, Inc.
- Alchian, Armen A & Demsetz, Harold, 1972.
"Production , Information Costs, and Economic Organization,"
American Economic Review,
American Economic Association, vol. 62(5), pages 777-95, December.
- Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics.
- Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
- Pommerehne, Werner W & Schneider, Friedrich, 1978. "Fiscal Illusion, Political Institutions, and Local Public Spending," Kyklos, Wiley Blackwell, vol. 31(3), pages 381-408.
- Richard A. Posner, 1974.
"Theories of Economic Regulation,"
NBER Working Papers
0041, National Bureau of Economic Research, Inc.
- Roubini, Nouriel & Alesina, Alberto, 1992. "Political Cycles in OECD Economies," Scholarly Articles 4553025, Harvard University Department of Economics.
- Rubinfeld, Daniel L., 1987. "The economics of the local public sector," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 11, pages 571-645 Elsevier.
- Giorgio Brosio & Juan Pablo Jiménez, 2011. "Maintaining taxes at the centre despite decentralization: interactions with national reforms," ICER Working Papers 10-2011, ICER - International Centre for Economic Research.
- Daniel Albalate & Germà Bel & Xavier Fageda, 2010. "Is it Redistribution or Centralization? On the Determinants of Government Investment in Infrastructure," Working Papers XREAP2010-15, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2010.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.