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Government and Cities: Contests and the Decentralization of Decision Making

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Author Info

  • Epstein, Gil S.

    ()
    (Bar-Ilan University)

  • Gang, Ira N.

    ()
    (Rutgers University)

Abstract

Governments do not have perfect information regarding the priorities and the needs of different groups in the economy. This lack of knowledge opens the door for different groups to lobby the government in order to receive the government’s support. We set up a model of hierarchical contests and compare the implications of a centralized allocation process with a decentralized allocation process. We show the potential existence of a poverty trap as a result of fiscal federalism.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 547.

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Length: 31 pages
Date of creation: Aug 2002
Date of revision:
Handle: RePEc:iza:izadps:dp547

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Related research

Keywords: fiscal federalism; economic models of political processes; contests; rentseeking; intergovernmental relations; interjurisdictional differentials and their effects;

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References

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  2. Gil S . Epstein & Shmuel Nitzan, 2002. "Endogenous Public Policy, Politicization and Welfare," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(4), pages 661-677, October.
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  23. Konrad, Kai A, 1994. "The Strategic Advantage of Being Poor: Private and Public Provision of Public Goods," Economica, London School of Economics and Political Science, vol. 61(241), pages 79-92, February.
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Citations

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Cited by:
  1. Gang, Ira N. & Epstein, Gil S., 2004. "Understanding the Development of Fundamentalism," IZA Discussion Papers 1227, Institute for the Study of Labor (IZA).
  2. Epstein, Gil S. & Gang, Ira N., 2005. "Contests, NGOs and Decentralizing Aid," IZA Discussion Papers 1711, Institute for the Study of Labor (IZA).

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