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Decentralization, Competition and the Efficiency of Federalism

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  • Hamlin, Alan P

Abstract

Arguments for the efficiency of federalism typically depend on a decentralization thesis and a competition thesis, both of which relate to mobility. In this essay, the author reviews and appraises these two lines of argument. The author suggests that the decentralization thesis is best seen not as an argument for the efficiency of federalism, but as an efficiency criterion against which models of federalism may be evaluated. By contrast, competition and mobility are aspects of the procedural mechanism of federalism that must be supplemented by explicit models of the political process. Copyright 1991 by The Economic Society of Australia.

Suggested Citation

  • Hamlin, Alan P, 1991. "Decentralization, Competition and the Efficiency of Federalism," The Economic Record, The Economic Society of Australia, vol. 67(198), pages 193-204, September.
  • Handle: RePEc:bla:ecorec:v:67:y:1991:i:198:p:193-204
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    References listed on IDEAS

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    1. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    2. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    3. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," Review of Economic Studies, Oxford University Press, vol. 60(1), pages 35-52.
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    5. William Easterly & Ross Levine, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1203-1250.
    6. repec:dau:papers:123456789/10091 is not listed on IDEAS
    7. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
    8. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    9. Knowles, Stephen & Owen, P. Dorian, 1995. "Health capital and cross-country variation in income per capita in the Mankiw-Romer-Weil model," Economics Letters, Elsevier, vol. 48(1), pages 99-106, April.
    10. Temple, Jonathan, 1998. "Equipment Investment and the Solow Model," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 39-62, January.
    11. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
    12. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, January.
    13. Jonathan R. W. Temple, 1998. "Robustness tests of the augmented Solow model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(4), pages 361-375.
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    Cited by:

    1. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
    2. Fabella, R.V., 2005. "A Nozick-Buchanan contractarian governance as solution to some Invisible Hand failures," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 284-295, May.
    3. repec:oup:cjrecs:v:10:y:2017:i:3:p:559-573. is not listed on IDEAS

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