The Political Economy of Policy Centralization: Direct Versus Representative Democracy
AbstractThis paper examines policy centralization outcomes in a two-jurisdiction, political economy model of public good provision choices with heterogeneous policy preferences and interjurisdictional policy spillovers, under alternative democratic choice procedures, namely, direct democracy and representative democracy. We show that policy centralization is more likely to occur if the choice to centralize is made by elected policymakers rather than by referendum. The reason for this result is that delegation of the harmonization choice to elected policymakers can effectively act as a policy commitment device by a pro-centralization jurisdiction and induce a reluctant partner to cooperate. In these situations, policy centralization will result in policies converging towards the choice preferred by the reluctant partner, rather than in a dilution of policy preferences.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 602.
Date of creation: 2001
Date of revision:
international cooperation; trade and environmental policy negotiations;
Other versions of this item:
- 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.
- 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.
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
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