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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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    Cited by:

    1. repec:oup:cjrecs:v:10:y:2017:i:3:p:559-573. is not listed on IDEAS
    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. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.

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