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A Principal-Agent Building Block for the Study of Decentralization and Integration

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Author Info

  • Mariano Tommasi

    ()
    (Department of Economics, Universidad de San Andres)

  • Federico Weinschelbaum

    ()
    (Department of Economics, Universidad de San Andres)

Abstract

The architecture of public decision making in the world is being changed through processes of “economic integration” and of “decentralization”. Some policy decisions are now taken at a higher level (i.e., monetary policy in Europe, trade policy in part of South America), while others are taken by smaller political units “closer to the people” (i.e., health and education policies in many Latin American countries). We provide a building block for the study of such processes, emphasizing the trade-o¤ between the advantages of centralized decision making (internalization of externalities) and those of decentralized decision making (increased principal-agent control by the citizens). We do so within the context of a class of principal-agent models known as common agency.

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File URL: ftp://webacademicos.udesa.edu.ar/pub/econ/doc20.pdf
File Function: First version, 1999
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Bibliographic Info

Paper provided by Universidad de San Andres, Departamento de Economia in its series Working Papers with number 20.

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Length: 29 pages
Date of creation: Nov 1999
Date of revision: Nov 1999
Handle: RePEc:sad:wpaper:20

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Keywords: principal-agent; decentralization; integration;

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References

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  8. Lockwood, Ben, 1998. "Distributive Politics and the Benefits of Decentralisation," CSGR Working papers series 10/98, Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick.
  9. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
  10. Pranab Bardhan & Dilip Mookherjee, 1998. "Expenditure Decentralization and the Delivery of Public Services in Developing Countries," Boston University - Institute for Economic Development 90, Boston University, Institute for Economic Development.
  11. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Reserving Market Incentives," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 83-92, Fall.
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Cited by:
  1. Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics.
  2. Juan Luis Gómez-Reino & Jorge Martinez-Vazquez, 2012. "An International Perspective on the Determinants of Local Government Fragmentation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1219, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  3. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
  4. Roberto Cortes Conde, 2008. "Spanish America Colonial Patterns: The Rio de La Plata," Working Papers 96, Universidad de San Andres, Departamento de Economia, revised Mar 2008.
  5. Pranab Bardhan, 2002. "Decentralization of Governance and Development," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 185-205, Fall.
  6. Mariano Tommasi & Pablo Sanguinetti, 2003. "Intergovernmental Transfers and Fiscal Behavior: Insurance versus Aggregate Discipline," Working Papers 60, Universidad de San Andres, Departamento de Economia, revised Aug 2003.
  7. Sebastian Eckardt, 2007. "Political Accountability, Fiscal Conditions, and Local Government Performance – Cross-Sectional Evidence from Indonesia," Working Papers 02-2007, Institute of Local Public Finance.
  8. Conning, Jonathan & Kevane, Michael, 2002. "Community-Based Targeting Mechanisms for Social Safety Nets: A Critical Review," World Development, Elsevier, vol. 30(3), pages 375-394, March.
  9. Deepa Narayan & Lant Pritchett & Soumya Kapoor, 2009. "Moving Out of Poverty : Volume 2. Success from the Bottom Up," World Bank Publications, The World Bank, number 11838, October.

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