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Rent-seeking, spillovers and the benefits of decentralization

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  • Cheikbossian, Guillaume

Abstract

In the presence of spillovers, decentralized provision of local public goods may lead to a higher surplus than centralized provision even though localities have identical preferences. Indeed, free-riding costs associated to decentralization can be lower than the costs of rent-seeking and influence activities under centralization. Actually, centralization yields a higher level of regional surplus only if both the spillover effect from local public spending is sufficiently large and the elasticity of the influence function is sufficiently small.

Suggested Citation

  • Cheikbossian, Guillaume, 2008. "Rent-seeking, spillovers and the benefits of decentralization," Journal of Urban Economics, Elsevier, vol. 63(1), pages 217-228, January.
    • Handle: RePEc:eee:juecon:v:63:y:2008:i:1:p:217-228
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    7. Paulo Arvate & Vladimir Ponczek, 2008. "Municipality secession, voter’s preference and persistence of power," Working Papers 08_07, Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto.
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    12. Amihai GLAZER & Stef PROOST, 2010. "Reducing rent seeking by providing wide public service," Working Papers of Department of Economics, Leuven ces10.31, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
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