Pooling Sovereignty and Subsidiarity Principle
AbstractThis paper focuses on the choice of centralization of public policy in an economy with two government levels. It argues that centralization by subsidiarity principle stresses a conflicting interest between different jurisdictions instead of working it out. The extent of the conflict of interest is affected by spillovers and differences in public spending tastes. Spending decisions are made by negotiation in the centralized legislature of local representatives, unless they fail to reach an agreement. In the latter case, policy is provided non-cooperatively by local governments. Results show that pooling sovereignty by subsidiarity principle fails to fully internalize spillovers and may produce misallocation of public resources.
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Bibliographic InfoPaper provided by Department of Economics, University of York in its series Discussion Papers with number 09/01.
Date of creation: Jan 2009
Date of revision:
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Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom
Phone: (0)1904 323776
Fax: (0)1904 323759
Web page: http://www.york.ac.uk/economics/
More information through EDIRC
Public goods; Centralization; Bargaining;
Find related papers by JEL classification:
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
- H0 - Public Economics - - General
- H40 - Public Economics - - Publicly Provided Goods - - - General
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- Ariel Rubinstein, 2010.
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Levine's Working Paper Archive
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POLIS Working Papers
114, Institute of Public Policy and Public Choice - POLIS.
- Michele Giuseppe Giuranno, 2009. "Regional Income Disparity and the Size of the Public Sector," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 11(5), pages 697-719, October.
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