Fiscal Decentralization: A Political Economy Perspective

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Fiscal Decentralization: A Political Economy Perspective

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Lockwood, Ben (University of Warwick and CEPR)

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Ben Lockwood

Abstract

This paper surveys recent contributions to the study of fiscal decentralization which adopt a political economy approach. It is argued that this approach can capture, in a variety of formal models, the plausible and influential ideas (increasingly, supported by empirical evidence) that fiscal decentralization can lead to improved preference-matching and accountability of government. In particular, recent work on centralized provision of public good provision via bargaining in a legislature shows how centralization reduces preference-matching, and recent work using "electoral agency" models formalizes the accountability argument. These models also provide insights into when decentralization may fail to deliver these benefits.

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Publisher Info
Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 721.

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Length: 35 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:wrk:warwec:721

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Find related papers by JEL classification:
H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-06-10 (All new papers)
NEP-PBE-2006-06-10 (Public Economics)
NEP-POL-2006-06-10 (Positive Political Economics)
NEP-URE-2006-06-10 (Urban & Real Estate Economics)

References listed on IDEAS
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Other versions:
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Other versions:
- Cremer, Jacques & Palfrey, Thomas R., . "In or Out?: Centralization by Majority Vote," Working Papers 879, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
- Crémer, Jacques & Palfrey, Thomas, 1994. "In or Out?: Centralization by Majority Vote," IDEI Working Papers 33, Institut d'Économie Industrielle (IDEI), Toulouse.
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Other versions:
- BELLEFLAMME, Paul & HINDRIKS, Jean, 2002. "Yardstick competition and political agency problems," CORE Discussion Papers 2002029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
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Alberto Alesina & Enrico Spolaore, 1995. "On the Number and Size of Nations," NBER Working Papers 5050, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
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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. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Oliver Lorz & Gerald Willmann, 2008. "Enlargement versus Deepening: The Trade-off Facing Economic Unions," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Other versions:
- Oliver Lorz & Gerald Willmann, 2008. "Enlargement versus Deepening: The Trade-off Facing Economic Unions," Vives discussion paper series 2, Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, Vives. [Downloadable!]
Paula Salinas & Albert Solé-Ollé, 2009. "Evaluating the effects of decentralization on educational outcomes in Spain?," Working Papers 2009/10, Institut d'Economia de Barcelona (IEB). [Downloadable!]
Paula Salinas Pena & Albert Sole-Olle, 2009. "Evaluating the effects of decentralization on educational outcomes in Spain," Working Papers in Economics 228, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
Michela Redoano, 2007. "Does Centralization Affect the Number and Size of Lobbies?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Other versions:
- Redoano, Michela, 2003. "Does Centralisation Affect The Number And Size Of Lobbies?," The Warwick Economics Research Paper Series (TWERPS) 674, University of Warwick, Department of Economics. [Downloadable!]
Federico Etro, 2006. "Political geography," Public Choice, Springer, vol. 127(3), pages 321-343, June. [Downloadable!] (restricted)
Iwan Barankay & Ben Lockwood, 2006. "Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons," IZA Discussion Papers 2477, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Iwan Barankay & Ben Lockwood, 2005. "Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons," Economics Discussion Papers 597, University of Essex, Department of Economics. [Downloadable!]
- Barankay, Iwan & Lockwood, Ben, 2006. "Decentralization and the Productive Efficiency of Government: Evidence from Swiss Cantons," CEPR Discussion Papers 5639, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Barankay, Iwan & Lockwood, Ben, 2007. "Decentralization and the productive efficiency of government: Evidence from Swiss cantons," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1197-1218, June. [Downloadable!] (restricted)
Alonso, Ricardo & Dessein, Wouter & Matouschek, Niko, 2006. "When Does Coordination Require Centralization?," CEPR Discussion Papers 5802, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Bård Harstad, 2007. "Harmonization and Side Payments in Political Cooperation," American Economic Review, American Economic Association, vol. 97(3), pages 871-889, June. [Downloadable!]
Sjef Ederveen & George Gelauff & JacquesPelkmans, 2006. "Assessing subsidiarity," CPB Documents 133, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]

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