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Distributive Politics and the Costs of Centralization

  • Lockwood, Ben

This paper integrates the distributive politics literature with the literature on decentralization by incorporating inter-regional project externalities into a standard model of distributive policy. A key finding is that the degree of uniformity (or 'universalism') of the provision of regional projects is endogenous and depends on the strength of the externality. The efficiency of decentralization and the performance of 'constitutional rules' (such as majority voting) which may be used to choose between decentralization and centralization are then discussed in this framework. Stronger externalities and more heterogeneity between regions need not imply that decentralization becomes more efficient.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2046.

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Date of creation: Dec 1998
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Handle: RePEc:cpr:ceprdp:2046
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  1. Seabright, Paul, 1994. "Accountability and Decentralization in Government: An Incomplete Contracts Model," CEPR Discussion Papers 889, C.E.P.R. Discussion Papers.
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  9. Persson, Torsten, 1998. "Economic Policy and Special Interest Politics," Economic Journal, Royal Economic Society, vol. 108(447), pages 310-27, March.
  10. Tim Besley & Stephen Coate, . "An Economic Model of Representative Democracy," Penn CARESS Working Papers ecf70d639d700dba5327ab0c8, Penn Economics Department.
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