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A Voting Model of Federal Standards with Externalities

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  • Crémer, Jacques
  • Palfrey, Thomas R.

Abstract

This paper proposes a framework for studying policy making in a federal system in the presence of spillover externalities. Local jurisdictions choose local policies by majority rule subject to standards that are set by majority rule at the federal level. We characterize the induced preferences of voters for federal policies, prove existence of local majority rule equilibrium, provide an example of nonexistence of global majority rule equilibrium, and explore the welfare properties of federal standards in the presence of spillovers.

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Bibliographic Info

Paper provided by California Institute of Technology, Division of the Humanities and Social Sciences in its series Working Papers with number 1171.

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Length: 23 pages
Date of creation: Aug 2003
Date of revision:
Publication status: Published:
Handle: RePEc:clt:sswopa:1171

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Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125
Phone: 626 395-4065
Fax: 626 405-9841
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Web page: http://www.hss.caltech.edu/ss

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Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125
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Related research

Keywords: voting; externalities; federalism;

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Cited by:
  1. Maria Gallego, David Scoones, 2005. "The Art of Compromise," Working Papers eg0042, Wilfrid Laurier University, Department of Economics, revised 2005.
  2. Bloch, Francis & Zenginobuz, Unal, 2004. "The Effect of Spillovers on the Provision of Local Public Goods," MPRA Paper 186, University Library of Munich, Germany, revised 05 Oct 2006.
  3. Cremer, Jacques & Palfrey, Thomas R., 2006. "An equilibrium voting model of federal standards with externalities," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 2091-2106, November.

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