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A Principal-Agent Building Block for the Study of Decentralization and Integration

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  • Mariano Tommasi

    (Universidad de San Andres)

  • Federico Weinschelbaum

    (Universidad de San Andres)

Abstract

The architecture of public decision making in the world is being changed through processes of "economic integration" and of "decentralization". Some policy decisions are now taken at a higher level (i.e., monetary policy in Europe, trade policy in part of South America), while others are taken by smaller political units "closer to the people" (i.e., health and education policies in many Latin American countries). We provide a building block for the study of such processes, emphasizing the trade-off between the advantages of centralized decision making (internalization of externalities) and those of decentralized decision making (increased principal-agent control by the citizens). We do so within the context of a class of principal-agent models known as common agency.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0457.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0457

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Cited by:
  1. Mariano Tommasi & Pablo Sanguinetti, 2003. "Intergovernmental Transfers and Fiscal Behavior: Insurance versus Aggregate Discipline," Working Papers, Universidad de San Andres, Departamento de Economia 60, Universidad de San Andres, Departamento de Economia, revised Aug 2003.
  2. Juan Luis Gómez-Reino & Jorge Martinez-Vazquez, 2012. "An International Perspective on the Determinants of Local Government Fragmentation," International Center for Public Policy Working Paper Series, at AYSPS, GSU, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University paper1219, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  3. Roberto Cortes Conde, 2008. "Spanish America Colonial Patterns: The Rio de La Plata," Working Papers, Universidad de San Andres, Departamento de Economia 96, Universidad de San Andres, Departamento de Economia, revised Mar 2008.
  4. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 16(4), pages 185-205, Fall.
  5. Sebastian Eckardt, 2007. "Political Accountability, Fiscal Conditions, and Local Government Performance – Cross-Sectional Evidence from Indonesia," Working Papers, Institute of Local Public Finance 02-2007, Institute of Local Public Finance.
  6. Deepa Narayan & Lant Pritchett & Soumya Kapoor, 2009. "Moving Out of Poverty : Volume 2. Success from the Bottom Up," World Bank Publications, The World Bank, number 11838, August.
  7. Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics.
  8. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, Elsevier, vol. 87(12), pages 2611-2637, December.
  9. Conning, Jonathan & Kevane, Michael, 2002. "Community-Based Targeting Mechanisms for Social Safety Nets: A Critical Review," World Development, Elsevier, Elsevier, vol. 30(3), pages 375-394, March.

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