Old and New Theories of Fiscal Federalism, Organizational Design Problems, and Tiebout
AbstractThis work is a contribution to the Second Generation Theory (SGT) of fiscal federalism that studies fiscal federalism through contemporary economic and industrial organization theory. First, it establishes context by introducing the two classic motivations in support of federalism, namely, incentives and knowledge. Second, it succinctly discusses the incentive-based organizational approach of the SGT. Third, it shows that the Tiebout model already embeds an organizational approach, which instead rests on a knowledge motivation. The underlying theme is that the SGT should include both the incentive and knowledge motivations for fiscal decentralization.
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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0509009.
Length: 18 pages
Date of creation: 21 Sep 2005
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Note: Type of Document - pdf; pages: 18
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Economic organization; Incentives; Knowledge; Second Generation Theory of fiscal federalism.;
Find related papers by JEL classification:
- D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other
- H10 - Public Economics - - Structure and Scope of Government - - - General
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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CEPR Discussion Papers
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- Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
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