Jorge P. Gordin () (GIGA Institute of Latin American Studies)
Abstract
This paper builds on institutional analysis to generate new conclusions about the economic viability of federalism. It does so by suggesting that Weingast´s seminal model of marketpreserving federalism falls short of accounting for the poor fiscal performance of multitiered systems in the developing world. This theoretical deficiency stems to a large extent from the insufficient attention paid by this model to the institutional complexity of federal systems, particularly the public policy effects of legislative malapportionment. Subsequent to an analytical discussion of the potential public spending and distributive politics distortions resulting from overrepresentation, we offer preliminary empirical evidence from Argentina, a federation exhibiting one of the most decentralized fiscal systems in the world and severe imbalances in the territorial distribution of legislative and economic resources. The findings show not only that said imbalances lead to sub-optimal fiscal results but also that they have a mutually-reinforcing relationship with regionalized patronage.
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Paper provided by GIGA German Institute of Global and Area Studies in its series GIGA Working Paper Series with number
52.
Find related papers by JEL classification: A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
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