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Intertwined Federalism: Accountability Problems under Partial Decentralization

  • Marcelin Joanis

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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Paper provided by CIRANO in its series CIRANO Working Papers with number 2009s-39.

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Length: 40 pages
Date of creation: 01 Sep 2009
Date of revision:
Handle: RePEc:cir:cirwor:2009s-39
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