Centralization and political accountability
In this paper we abstract from the usual gains and costs of decentralization (e.g. preference matching, spillovers and economies of scale). Instead we compare the political accountability of decentralized governments relative to centralized ones when there is a risk of "bad" governance. We study both the selection and incentive effects of accountability. A key aspect of centralization is to make the politician answerable to multiple constituencies subject to a common budget constraint. Our main findings are that (a) when politicians differ in competence, decentralization unambiguously dominates; and (b) when politicians differ in honesty, decentralization and centralization have conflicting accountability effects (when one provides better discipline, the other gives better selection). The analysis then identifies the circumstances under which centralization may increase voter welfare. The more general lesson that we can draw is that different institutional forms give rise to different information to the voters on which electoral accountability can be based. Therefore they differ on how effective elections can be in disciplining and selecting policymakers.
|Date of creation:||00 Jul 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Belleflamme & Jean Hindriks, 2005.
"Yardstick competition and political agency problems,"
Social Choice and Welfare,
Springer, vol. 24(1), pages 155-169, 09.
- BELLEFLAMME, Paul & HINDRIKS, Jean, 2002. "Yardstick competition and political agency problems," CORE Discussion Papers 2002029, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Paul Belleflamme & Jean Hindriks, 2001. "Yardstick Competition and Political Agency Problems," Working Papers 441, Queen Mary University of London, School of Economics and Finance.
- Alberto Alesina & Enrico Spolaore, 1995.
"On the Number and Size of Nations,"
NBER Working Papers
5050, National Bureau of Economic Research, Inc.
- Timothy Besley & Robin Burgess, 2000.
"The Political Economy of Government Responsiveness: Theory and Evidence from India,"
STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers
28, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Timothy Besley & Robin Burgess, 2000. "The political economy of government responsiveness: theory and evidence from India," LSE Research Online Documents on Economics 2308, London School of Economics and Political Science, LSE Library.
- Besley, Timothy J. & Burgess, Robin, 2001. "The Political Economy of Government Responsiveness: Theory and Evidence from India," CEPR Discussion Papers 2721, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2004052. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS)
If references are entirely missing, you can add them using this form.