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Leviathan and Pure Public Goods in a Federation with Mobile Populations

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  • Chikara Yamaguchi

Abstract

This paper investigates properties of the second best allocation in a federation where regional governments provide a pure public good non-cooperatively and policy makers are neither entirely benevolent nor wholly self-serving. A high degree of household mobility across regions forces the governments to raise the efficiency of the public good, however, it also helps to waste resources. It is shown that regional Leviathans not only under-provide the public good but also decrease the amount of wasteful expenditures as households become less mobile. Central government's intervention can enhance efficiency if households are attached to particular regions.

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  • Chikara Yamaguchi, 2004. "Leviathan and Pure Public Goods in a Federation with Mobile Populations," Journal of Applied Economics, Taylor & Francis Journals, vol. 7(2), pages 369-389, November.
    • Handle: RePEc:taf:recsxx:v:7:y:2004:i:2:p:369-389
    DOI: 10.1080/15140326.2004.12040615
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    Cited by:

    1. Jongmin Shon, 2022. "Does Competition Tame the Leviathan? A Case of Earmarked Spending for Transportation," Hacienda Pública Española / Review of Public Economics, IEF, vol. 241(2), pages 59-78, June.

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