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Intertwined Federalism: Accountability Problems under Partial Decentralization

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  • Marcelin Joanis

Abstract

Decentralization reforms typically lead to the coexistence of multiple tiers of government in a given policy area. To analyze the welfare effects of such partial decentralization, this paper develops a political agency model in which two levels of government are involved in public good provision and voters are imperfectly informed about each government's contribution to the public good. The model predicts that a departure from the polar cases of complete centralization and complete decentralization is desirable only if the benefits of vertical complementarity in public good provision outweigh the costs of reduced accountability, which result from detrimental vertical strategic interactions operating through the electoral process. La décentralisation mène typiquement à la coexistence de plusieurs niveaux de gouvernement dans un domaine donné de l'activité gouvernementale. Pour analyser les effets sur le bien-être d'une telle décentralisation partielle, cet article développe un modèle principal-agent dans lequel deux niveaux de gouvernement sont impliqués dans la fourniture d'un bien public et où les électeurs sont imparfaitement informés de la contribution de chaque gouvernement au bien public. Le modèle prédit qu'une dérogation aux cas limites de la centralisation complète et de la décentralisation complète n'est désirable que si les bénéfices associés à la complémentarité verticale dans la fourniture du bien public l'emportent sur les coûts découlant d'une imputabilité réduite. Ces derniers résultent des interactions stratégiques verticales opérant à travers le processus électoral.

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  • Marcelin Joanis, 2009. "Intertwined Federalism: Accountability Problems under Partial Decentralization," CIRANO Working Papers 2009s-39, CIRANO.
  • Handle: RePEc:cir:cirwor:2009s-39
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    File URL: https://cirano.qc.ca/files/publications/2009s-39.pdf
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    Cited by:

    1. Marcelin Joanis, 2013. "Sharing the Blame? Local Electoral Accountability and Centralized School Finance in California," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 335-359, November.
    2. Bordignon, Massimo & Grembi, Veronica & Piazza, Santino, 2017. "Who do you blame in local finance? An analysis of municipal financing in Italy," European Journal of Political Economy, Elsevier, vol. 49(C), pages 146-163.
    3. Cheng, Yuk-Shing & Chung, Kim-Sau, 2013. "Too many mothers-in-law?," Journal of Development Economics, Elsevier, vol. 105(C), pages 69-76.
    4. Mario Jametti & Marcelin Joanis, 2016. "Electoral Competition as a Determinant of Fiscal Decentralisation," Fiscal Studies, Institute for Fiscal Studies, vol. 37, pages 285-300, June.
    5. Mario Jametti & Marcelin Joanis, 2010. "Determinants of fiscal decentralization: political economy aspects," Working Papers 2010/7, Institut d'Economia de Barcelona (IEB).
    6. Benny Geys & Jan Vermeir, 2014. "Party Cues In Elections Under Multilevel Governance: Theory And Evidence From Us States," Journal of the European Economic Association, European Economic Association, vol. 12(4), pages 1029-1058, August.
    7. Ross Hickey, 2015. "Intergovernmental transfers and re-election concerned politicians," Economics of Governance, Springer, vol. 16(4), pages 331-351, November.
    8. Estache, Antonio & Garsous, Grégoire & Seroa da Motta, Ronaldo, 2016. "Shared Mandates, Moral Hazard, and Political (Mis)alignment in a Decentralized Economy," World Development, Elsevier, vol. 83(C), pages 98-110.
    9. Mario Jametti & Marcelin Joanis, 2010. "Determinants of fiscal decentralization: political economy aspects," Working Papers 2010/7, Institut d'Economia de Barcelona (IEB).
    10. Estache, Antonio & Garsous, Grégoire & Seroa da Motta, Ronaldo, 2016. "Shared Mandates, Moral Hazard, and Political (Mis)alignment in a Decentralized Economy," World Development, Elsevier, vol. 83(C), pages 98-110.
    11. Marcelin Joanis, 2013. "Sharing the Blame? Local Electoral Accountability and Centralized School Finance in California," Economics and Politics, Wiley Blackwell, vol. 25(3), pages 335-359, November.
    12. Mario Jametti & Marcelin Joanis, 2020. "Elections and de facto expenditure decentralization in Canada," Economics of Governance, Springer, vol. 21(3), pages 275-297, September.
    13. James Alm & Robert D. Buschman & David L. Sjoquist, 0. "Citizen "Trust" as an Explanation of State Education Funding to Local School Districts," Publius: The Journal of Federalism, Oxford University Press, vol. 41(4), pages 636-661.

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    More about this item

    Keywords

    decentralization; accountability; shared responsibility; federalism; vertical interactions.; décentralisation; imputabilité; responsabilité partagée; fédéralisme; interactions verticales.;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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