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Policy Innovation In Federal Systems

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Author Info

  • Christos Kotsogiannis

    (University of Exeter)

  • Robert Schwager

    (Georg-August-Universitat Gottingen)

Abstract

Conventional wisdom has it that policy innovation is better promoted in a federal rather than in a unitary system. Recent research, however, has provided theoretical evidence to the contrary: a multi-jurisdictional system is characterized---due to the existence of a horizontal information externality---by under-provision of policy innovation. This paper presents a simple model that introduces political competition for federal office. Under such competition political actors use the innovative policies in order to signal ability to the electorate. In the equilibrium analyzed policy innovation occurs more frequently than in a unitary system. It is thus shown that, once electoral motives are accounted for, the conventional wisdom is validated.

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File URL: http://128.118.178.162/eps/urb/papers/0504/0504001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Urban/Regional with number 0504001.

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Length: 13 pages
Date of creation: 04 Apr 2005
Date of revision:
Handle: RePEc:wpa:wuwpur:0504001

Note: Type of Document - pdf; pages: 13
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Web page: http://128.118.178.162

Related research

Keywords: Fiscal federalism; policy innovation; policy experimentation.;

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References

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  1. Strumpf, Koleman S, 2002. " Does Government Decentralization Increase Policy Innovation?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(2), pages 207-41.
  2. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
  3. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
  4. Michael J. Keen & Christos Kotsogiannis, 2002. "Does Federalism Lead to Excessively High Taxes?," American Economic Review, American Economic Association, vol. 92(1), pages 363-370, March.
  5. Kollman, Ken & Miller, John H & Page, Scott E, 2000. "Decentralization and the Search for Policy Solutions," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(1), pages 102-28, April.
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Citations

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Cited by:
  1. Hendriks, Jean & Lockwood, Ben, 2005. "Decentralization and Electoral Accountability : Incentives, Separation, and Voter Welfare," The Warwick Economics Research Paper Series (TWERPS) 729, University of Warwick, Department of Economics.
  2. Johannes Rincke, 2005. "Neighborhood Influence and Political Change: Evidence from US School Districts," Public Economics 0511011, EconWPA.
  3. Robert Schwager, 2005. "PISA-Schock und Hochschulmisere - Hat der deutsche Bildungsföderalismus versagt?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 6(2), pages 189-205, 05.

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