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Unequal Provision of Local Public Services under the Threat of Secession

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  • Brink , Anna

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

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    Abstract

    This paper studies to what extent it is possible to discriminate between two municipality parts by unequal public service provision when there is a threat of secession. The objective of the local politicians is to maximize utility for only one part of a municipality. The discriminated part is small and politically marginalized, but has the option to secede. The power of the small part's population is in this way entirely exercised through the threat of secession. It becomes their guarantee against being taxed too heavily or against obtaining too little of public services. The case of three recent secession attempts in Göteborg, Sweden, is discussed in light of the model.

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    File URL: http://hdl.handle.net/2077/2830
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    Bibliographic Info

    Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 103.

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    Length: 19 pages
    Date of creation: 05 Sep 2003
    Date of revision:
    Handle: RePEc:hhs:gunwpe:0103

    Contact details of provider:
    Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
    Phone: 031-773 10 00
    Web page: http://www.handels.gu.se/econ/
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    Keywords: secession; local public services;

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    References

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    1. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    2. Alesina, Alberto & Perotti, Roberto & Spolaore, Enrico, 1995. "Togetheror separately? Issues on the costs and benefits of political and fiscal unions," European Economic Review, Elsevier, vol. 39(3-4), pages 751-758, April.
    3. Bolton, Patrick & Roland, Gerard, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1057-90, November.
    4. Bolton, Patrick & Roland, Gerard & Spolaore, Enrico, 1996. "Economic theories of the break-up and integration of nations," European Economic Review, Elsevier, vol. 40(3-5), pages 697-705, April.
    5. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
    6. Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-31, December.
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    Cited by:
    1. Brink , Anna, 2003. "Deciding Who's Decisive: Municipality Break-Ups and the Behavior of Local Politicians," Working Papers in Economics 104, University of Gothenburg, Department of Economics.

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