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Competition among different levels of government: the re-election problem

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  • Ponzano, Ferruccio

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Abstract

The aim of this paper is to analyse competition between two levels of government that want to maximise their tax revenues facing the problem of re-election. We assume that citizens have incomplete information about central and local public goods. Then, they are not able to choose a single efficient level of these two goods but they are able to choose a set of combinations. This choice represent the constraint faced by the levels of government. We develop a model starting from this assumption and three extensions to analyse the behaviour of two levels of government in different scenarios. We find that in each situation the equal sharing of the tax revenue is not the best solution for the governments.

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File URL: http://polis.unipmn.it/pubbl/RePEc/uca/ucapdv/ponzano53.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 47.

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Length: 31 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:uca:ucapdv:47

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