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The welfare costs of national standards: a contribution to the debate on the outcomes of de/centralization

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  • Brosio, Giorgio
  • Zanola, Roberto

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Abstract

This paper analyzes the welfare losses deriving from centralized, uniform levels of public provision of good and services deriving from standards set up by a given level of government. The aim of the paper is to contribute to the growing literature on the e?ective outcomes of decentralization by looking at the other side of the coin, namely at the impact of centralized provision. It develops a simple theoretical model and tests it with reference to public health care provision in Italy. The evidence shows that, while levels of satisfaction increase with income, which is a standard result of the theory, they are lower in the poorer regions where, due to the standards, the share of income absorbed by health care is substantially higher than in the richer regions.

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File URL: http://polis.unipmn.it/pubbl/RePEc/uca/ucapdv/zanola125.pdf
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Bibliographic Info

Paper provided by Institute of Public Policy and Public Choice - POLIS in its series POLIS Working Papers with number 113.

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Length: 29 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:uca:ucapdv:113

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Web page: http://polis.unipmn.it

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  1. Farasat A. S. Bokhari & Yunwei Gai & Pablo Gottret, 2007. "Government health expenditures and health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 257-273.
  2. Ben Lockwood, 2004. "Decentralization via Federal and Unitary Referenda," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 79-108, 02.
  3. Cremer, Jacques & Palfrey, Thomas R., 2006. "An equilibrium voting model of federal standards with externalities," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 2091-2106, November.
  4. Levaggi, Rosella & Zanola, Roberto, 2003. "Flypaper Effect and Sluggishness: Evidence from Regional Health Expenditure in Italy," International Tax and Public Finance, Springer, vol. 10(5), pages 535-47, September.
  5. Barankay, Iwan & Lockwood, Ben, 2006. "Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons," IZA Discussion Papers 2477, Institute for the Study of Labor (IZA).
  6. Thornton, John, 2007. "Fiscal decentralization and economic growth reconsidered," Journal of Urban Economics, Elsevier, vol. 61(1), pages 64-70, January.
  7. Epple, Dennis & Romano, Richard E, 1996. "Public Provision of Private Goods," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 57-84, February.
  8. Andr�s Rodr�guez-Pose & Adala Bwire, 2004. "The economic (in)efficiency of devolution," Environment and Planning A, Pion Ltd, London, vol. 36(11), pages 1907-1928, November.
  9. Koleman S. Strumpf & Felix Oberholzer-Gee, 2002. "Endogenous Policy Decentralization: Testing the Central Tenet of Economic Federalism," Journal of Political Economy, University of Chicago Press, vol. 110(1), pages 1-36, February.
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Cited by:
  1. Orso, Cristina Elisa, 2009. "Formal and informal sectors: Interactions between moneylenders and traditional banks in the rural Indian credit market," POLIS Working Papers 135, Institute of Public Policy and Public Choice - POLIS.
  2. Piero Cavaleri & Michael Keren & Giovanni B. Ramello & Vittorio Valli, 2009. "Publishing an E-Journal on a Shoe String: Is It a Sustainable Project?," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 39(1), pages 89-101, March.
  3. Giuranno, Michele, 2009. "The logic of party coalitions with political activism and public financing," POLIS Working Papers 134, Institute of Public Policy and Public Choice - POLIS.
  4. Privileggi, Fabio, 2008. "On the transition dynamics in endogenous recombinant growth models," POLIS Working Papers 120, Institute of Public Policy and Public Choice - POLIS.
  5. Bondonio, Daniele, 2009. "Impact identification strategies for evaluating business incentive programs," POLIS Working Papers 129, Institute of Public Policy and Public Choice - POLIS.

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