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Civil Conflict, Federalism and Strategic Delegation of Leadership

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  • Colin Jennings

    ()
    (Department of Economics, University of Strathclyde)

  • Hein Roelfsema

    (Utrecht School of Economics, Utrecht University)

Abstract

This article analyses negative externalities that policy makers in one region or group may impose upon the citizens of neighbouring regions or groups. These externalities may be material, but they may also be psychological (in the form of envy). The latter form of externality may arise from the production of "conspicuous" public goods. As a result, decentralized provision of conspicuous public goods may be too high. Potentially, a centralized legislature may internalize negative externalities. However, in a model with strategic delegation we argue that the median voter in each jurisdiction may anticipate a reduction in local public goods supply and delegates to a policymaker who cares more for public goods than she does herself. This last effect mitigates the expected benefits of policy centralization. The authors' theory is then applied to the setting of civil conflict, where they discuss electoral outcomes in Northern Ireland and Yugoslavia before and after significant institutional changes which affected the degree of centralization. These case studies provide support for the authors' theoretical predictions.

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File URL: http://www.strath.ac.uk/media/departments/economics/researchdiscussionpapers/2008/media_101946_en.pdf
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Bibliographic Info

Paper provided by University of Strathclyde Business School, Department of Economics in its series Working Papers with number 0803.

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Length: 28 pages
Date of creation: Mar 2008
Date of revision:
Handle: RePEc:str:wpaper:0803

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Keywords: conflict; federalism; strategic delegation;

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  1. Gali, Jordi, 1994. "Keeping Up with the Joneses: Consumption Externalities, Portfolio Choice, and Asset Prices," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(1), pages 1-8, February.
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  5. Robert A.J. Dur & Hein J. Roelfsema, 2002. "Why does Centralisation fail to internalise Policy Externalities?," Tinbergen Institute Discussion Papers 02-056/3, Tinbergen Institute, revised 11 Nov 2003.
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  14. Jennings, Colin, 2007. "Political leadership, conflict, and the prospects for constitutional peace," Policy Research Working Paper Series 4196, The World Bank.
  15. Yeung Lewis Chan & Leonid Kogan, 2002. "Catching Up with the Joneses: Heterogeneous Preferences and the Dynamics of Asset Prices," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1255-1285, December.
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Cited by:
  1. Colin Jennings, 2008. "Intra-Group Competition and Inter-Group Conflict: An Application to Northern Ireland," Working Papers 0809, University of Strathclyde Business School, Department of Economics.
  2. R. Emre Aytimur & Aristotelis Boukouras & Robert Schwager, 2012. "The Citizen-Candidate Model with Imperfect Policy Control," CESifo Working Paper Series 3900, CESifo Group Munich.
  3. Stefan Brandauer & Florian Englmaier, 2006. "A Model of Strategic Delegation in Contests between Groups," CESifo Working Paper Series 1654, CESifo Group Munich.

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