Jan K. Brueckner () (Department of Economics, University of California-Irvine)
Abstract
The 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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Publisher Info
Paper provided by University of California-Irvine, Department of Economics in its series Working Papers with number
070804.
Find related papers by JEL classification: H0 - Public Economics - - General H7 - Public Economics - - State and Local Government; Intergovernmental Relations
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