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Intertwined Federalism: Accountability Problems under Partial Decentralization

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  • Marcelin Joanis

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Abstract

Decentralization reforms typically lead to the coexistence of multiple tiers of government in a given policy area. To analyze the welfare effects of such partial decentralization, this paper develops a political agency model in which two levels of government are involved in public good provision and voters are imperfectly informed about each government's contribution to the public good. The model predicts that a departure from the polar cases of complete centralization and complete decentralization is desirable only if the benefits of vertical complementarity in public good provision outweigh the costs of reduced accountability, which result from detrimental vertical strategic interactions operating through the electoral process. La décentralisation mène typiquement à la coexistence de plusieurs niveaux de gouvernement dans un domaine donné de l’activité gouvernementale. Pour analyser les effets sur le bien-être d’une telle décentralisation partielle, cet article développe un modèle principal-agent dans lequel deux niveaux de gouvernement sont impliqués dans la fourniture d’un bien public et où les électeurs sont imparfaitement informés de la contribution de chaque gouvernement au bien public. Le modèle prédit qu’une dérogation aux cas limites de la centralisation complète et de la décentralisation complète n’est désirable que si les bénéfices associés à la complémentarité verticale dans la fourniture du bien public l’emportent sur les coûts découlant d’une imputabilité réduite. Ces derniers résultent des interactions stratégiques verticales opérant à travers le processus électoral.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2009s-39.

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Date of creation: 01 Sep 2009
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Handle: RePEc:cir:cirwor:2009s-39

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Keywords: decentralization; accountability; shared responsibility; federalism; vertical interactions. ; décentralisation; imputabilité; responsabilité partagée; fédéralisme; interactions verticales.;

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  1. Arzaghi, Mohammad & Henderson, J. Vernon, 2005. "Why countries are fiscally decentralizing," Journal of Public Economics, Elsevier, vol. 89(7), pages 1157-1189, July.
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Citations

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Cited by:
  1. Massimo Bordignon & Santino Piazza, 2010. "Who do you blame in local finance? An analysis of municipal financing in Italy," DISCE - Quaderni dell'Istituto di Economia e Finanza ief0094, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  2. James Alm & Robert D. Buschman & David L. Sjoquist, 2012. "Citizen "Trust" as an Explanation of State Education Funding to Local School Districts," Working Papers 1208, Tulane University, Department of Economics.
  3. Marcelin Joanis, 2009. "Sharing the blame? Local electoral accountability and centralized school finance in California," Working Papers 2009/33, Institut d'Economia de Barcelona (IEB).
  4. Mario Jametti & Marcelin Joanis, 2010. "Determinants of fiscal decentralization: political economy aspects," Working Papers 2010/7, Institut d'Economia de Barcelona (IEB).
  5. Cheng, Yuk-Shing & Chung, Kim-Sau, 2013. "Too many mothers-in-law?," Journal of Development Economics, Elsevier, vol. 105(C), pages 69-76.
  6. Mario Jametti & Marcelin Joanis, 2011. "Electoral Competition as a Determinant of Fiscal Decentralization," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1107, USI Università della Svizzera italiana.
  7. Geys, Benny & Vermeir, Jan, 2012. "Party cues in elections under multilevel governance: Theory and evidence from US states," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2012-107, Social Science Research Center Berlin (WZB).
  8. Hickey, Ross, 2010. "Intergovernmental Transfers and Re-Election Concerned Politicians," MPRA Paper 27204, University Library of Munich, Germany.

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