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Incentives for separation and incentives for public good provision

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  • Staal, Klaas
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    Abstract

    In this paper I examine the incentives of regions to unite, to separate and to provide public goods. Separation allows for greater influence over the nature of political decision making while unification allows regions to exploit economies of scale in the provision of public goods. When public good provision is relatively inexpensive, separation occurs since individuals want to assert greater influence, while for intermediate costs of public good provision, separation can be explained by the desires for greater influence as well as for more public goods. Compared with the social optimum, there are excessive incentives for public good provision as well as excessive incentives for separation.

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    File URL: http://epub.ub.uni-muenchen.de/13447/1/104.pdf
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    Bibliographic Info

    Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 104.

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    Date of creation: Mar 2006
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    Handle: RePEc:trf:wpaper:104

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    Keywords: unification; separation; public good provision; voting;

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    1. Lockwood, Ben, 2002. "Distributive Politics and the Costs of Centralization," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 69(2), pages 313-37, April.
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    13. Sanjeev Goyal & Klaas Staal, 2000. "The Political Economy of Regionalism," Econometric Society World Congress 2000 Contributed Papers, Econometric Society 0287, Econometric Society.
    14. Christoph Lülfesmann, 2000. "Central Governance or Subsidiarity: A Property-Rights Approach to Federalism," Bonn Econ Discussion Papers, University of Bonn, Germany bgse5_2001, University of Bonn, Germany.
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    Cited by:
    1. Libman, Alexander Mikhailovich, 2009. "Эндогенные Границы И Распределение Власти В Федерациях И Международных Сообществах
      [ENDOGENOUS BOUNDARIES AND DISTRIBUTION O
      ," MPRA Paper 16473, University Library of Munich, Germany.

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