Government and Cities: Contests and the Decentralization of Decision Making
AbstractGovernments do not have perfect information regarding the priorities and the needs of different groups in the economy. This lack of knowledge opens the door for different groups to lobby the government in order to receive the government’s support. We set up a model of hierarchical contests and compare the implications of a centralized allocation process with a decentralized allocation process. We show the potential existence of a poverty trap as a result of fiscal federalism.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3585.
Date of creation: Oct 2002
Date of revision:
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Other versions of this item:
- Ira N. Gang & Gil S. Epstein, 2002. "Government and Cities: Contests and the Decentralization of Decision Making," Departmental Working Papers 200215, Rutgers University, Department of Economics.
- Epstein, Gil S. & Gang, Ira N., 2002. "Government and Cities: Contests and the Decentralization of Decision Making," IZA Discussion Papers 547, Institute for the Study of Labor (IZA).
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-02-18 (All new papers)
- NEP-CDM-2003-02-18 (Collective Decision-Making)
- NEP-POL-2003-02-18 (Positive Political Economics)
- NEP-URE-2003-02-18 (Urban & Real Estate Economics)
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