Partial Fiscal Decentralization
AbstractThe fiscal decentralization impulse now sweeping the world often leads to partial decentralization, where subnational governments are funded by central transfers, rather than leading to full local autonomy. Despite the practical important of this arrangement, the literature contains no economic analysis of a partial decentralization regime in a Tiebout-style model. This paper provides such an analysis, relying on the key assumption that public-good provision requires effort on the part of government officials. By choosing different degrees of effort, localities can then provide different public-good levels even when a fixed, common transfer constrains them to spend the same amount. A number of useful results are derived.
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Bibliographic InfoPaper provided by University of California-Irvine, Department of Economics in its series Working Papers with number 070804.
Length: 33 pages
Date of creation: Sep 2007
Date of revision:
Other versions of this item:
- H0 - Public Economics - - General
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-17 (All new papers)
- NEP-PBE-2007-11-17 (Public Economics)
- NEP-URE-2007-11-17 (Urban & Real Estate Economics)
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