The Art of Making Everybody Happy: How to Prevent a Secession
AbstractIn this paper we consider a model of the country with heterogeneous population and examine compensation schemes that may prevent a threat of secession by dissatisfied regions. We show that horizontal imbalances are combatable with secession-proof compensation schemes that entail a degree of partial equalization: the disadvantageous regions should be subsidized but the burden on advantageous regions should not be too excessive. In the case of uniform distribution, we establish the 50-percent compensation rule for disadvantageous regions. Thus, we argue for a limited gap reduction between advantageous and disadvantageous regions and show that neither laissez faire nor Rawlsian allocation is secession-proof.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 01/176.
Date of creation: 01 Nov 2001
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Enrico Spolaore & Alberto Alesina & Romain Wacziarg, 2000.
"Economic Integration and Political Disintegration,"
American Economic Review,
American Economic Association, vol. 90(5), pages 1276-1296, December.
- Alberto Alesina & Enrico Spolaore & Romain Wacziarg, 1997. "Economic Integration and Political Disintegration," NBER Working Papers 6163, National Bureau of Economic Research, Inc.
- Wacziarg, Romain & Spolaore, Enrico & Alesina, Alberto, 2000. "Economic Integration and Political Disintegration," Scholarly Articles 4553029, Harvard University Department of Economics.
- Casella, Alessandra, 1992. "On Markets and Clubs: Economic and Political Integration of Regions with Unequal Productivity," American Economic Review, American Economic Association, vol. 82(2), pages 115-21, May.
- 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.
- Bordignon, Massimo & Brusco, Sandro, 2001.
"Optimal secession rules,"
European Economic Review,
Elsevier, vol. 45(10), pages 1811-1834, December.
- Jehiel, Philippe & Scotchmer, Suzanne, 2001. "Constitutional Rules of Exclusion in Jurisdiction Formation," Review of Economic Studies, Wiley Blackwell, vol. 68(2), pages 393-413, April.
- Guesnerie Roger & Oddou Claude, 1979.
"Second best taxation as a game,"
CEPREMAP Working Papers (Couverture Orange)
- Casella, Alessandra & Feinstein, Jonathan, 1991.
"Public Goods in Trade: On the Formation of Markets and Political Jurisdictions,"
CEPR Discussion Papers
511, C.E.P.R. Discussion Papers.
- Casella, A. & Feinstein, J.S., 1992. "Public Goods in Trade: On the Formation of Market and political Jurisdictions," Working Papers e-92-12, Hoover Institution, Stanford University.
- Alessandra Casella & Jonathan S. Feinstein, 1990. "Public Goods in Trade: On the Formation of Markets and Political Jurisdictions," NBER Working Papers 3554, National Bureau of Economic Research, Inc.
- Caplin, Andrew & Nalebuff, Barry, 1991.
"Aggregation and Social Choice: A Mean Voter Theorem,"
Econometric Society, vol. 59(1), pages 1-23, January.
- Andrew Caplin & Barry Nalebuff, 1990. "Aggregation and Social Choice: A Mean Voter Theorem," Cowles Foundation Discussion Papers 938, Cowles Foundation for Research in Economics, Yale University.
- Caplin, A. & Nalebuff, B., 1989. "Aggregation And Social Choice: A Mean Voter Theorem," Discussion Papers 1989_31, Columbia University, Department of Economics.
- Friedman, David, 1977. "A Theory of the Size and Shape of Nations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 59-77, February.
- Bolton, Patrick & Roland, Gerard, 1996. "Distributional Conflicts, Factor Mobility, and Political Integration," American Economic Review, American Economic Association, vol. 86(2), pages 99-104, May.
- Alberto Alesina & Enrico Spolaore, 1996. "International Conflict, Defense Spending and the Size of Countries," NBER Working Papers 5694, National Bureau of Economic Research, Inc.
- Wittman, Donald, 1991. "Nations and States: Mergers and Acquisitions; Dissolutions and Divorce," American Economic Review, American Economic Association, vol. 81(2), pages 126-29, May.
- Greenberg, Joseph & Weber, Shlomo, 1986. "Strong tiebout equilibrium under restricted preferences domain," Journal of Economic Theory, Elsevier, vol. 38(1), pages 101-117, February.
- Weber, Shlomo, 1992. "On Hierarchical Spatial Competition," Review of Economic Studies, Wiley Blackwell, vol. 59(2), pages 407-25, April.
- Persson, Torsten & Tabellini, Guido, 1996. "Federal Fiscal Constitutions: Risk Sharing and Moral Hazard," Econometrica, Econometric Society, vol. 64(3), pages 623-46, May.
- Fidrmuc, Jan, 1999. "Stochastic Shocks and Incentives for (Dis)Integration," CEPR Discussion Papers 2104, C.E.P.R. Discussion Papers.
- Alesina, Alberto & Spolaore, Enrico, 2005.
"War, peace, and the size of countries,"
Journal of Public Economics,
Elsevier, vol. 89(7), pages 1333-1354, July.
- Spolaore, Enrico & Alesina, Alberto, 2005. "War, Peace, and the Size of Countries," Scholarly Articles 4553002, Harvard University Department of Economics.
- Enrico Spolaore & Alberto Alesina, 2001. "War, Peace and the Size of Countries," Harvard Institute of Economic Research Working Papers 1937, Harvard - Institute of Economic Research.
- Alessandra Casella, 2002.
"Redistribution Policy: A European Model,"
NBER Working Papers
9258, National Bureau of Economic Research, Inc.
- Klaas Staal, 2004. "Country Size and Public Good Provision," Tinbergen Institute Discussion Papers 04-026/1, Tinbergen Institute.
- K Staal, 2004. "Country size and public good provision," Econometric Society 2004 Australasian Meetings 156, Econometric Society.
- Santiago Lago Peñas, 2002. "Nivelación interterritorial e ineficiencia de las decisiones presupuestarias: reflexiones para el caso español," Hacienda Pública Española, IEF, vol. 162(3), pages 79-100, Â¨Septemb.
- Robert Dur & Klaas Staal, 2003. "National Interference in Local Public Good Provision," Tinbergen Institute Discussion Papers 03-074/1, Tinbergen Institute.
- Staal, Klaas, 2006. "Country size and publicly provided goods," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 187, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Jackson, Matthew O. & Nicolo, Antonio, 2002.
"The Strategy-Proof Provision of Public Goods Under Congestion and Crowding Preferences,"
1148, California Institute of Technology, Division of the Humanities and Social Sciences.
- Jackson, M.O.Matthew O. & Nicolo, Antonio, 2004. "The strategy-proof provision of public goods under congestion and crowding preferences," Journal of Economic Theory, Elsevier, vol. 115(2), pages 278-308, April.
- Matthew O. Jackson & Antonio Nicolo, 2002. "The Strategy-Proof Provision of Public Goods under Congestion and Crowding Preferences," Microeconomics 0211005, EconWPA.
- Ehtisham Ahmad & Raju Jan Singh, 2003. "Political Economy of Oil-Revenue Sharing in a Developing Country: Illustrations from Nigeria," IMF Working Papers 03/16, International Monetary Fund.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.