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Achieving stability in heterogeneous societies: multi-jurisdictional structures, and redistribution policies

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Abstract

Consider a “linear world” populated by several agents. These agents’ locations are identified with optimal variety of a horizontally differentiated local public good. Agents are to be partitioned into several communities (hereafter, groups), and each group chooses a variety of public good to be produced and consumed by members of that group via the majority voting procedure. It is shown that a stable partition may fail to exist, where stability means that no potential group would like to secede and form a new community. At the same time, compensation schemes are proposed which guarantee the existence of a stable partition. Small societies are studied in detail, as well as certain special types of distributions of agents’ locations.

Suggested Citation

  • Savvateev Alexey, 2004. "Achieving stability in heterogeneous societies: multi-jurisdictional structures, and redistribution policies," EERC Working Paper Series 04-13e, EERC Research Network, Russia and CIS.
    • Handle: RePEc:eer:wpalle:04-13e
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    Cited by:

    1. Musatov, D. & Savvateev, A., 2022. "Mathematical models of stable jurisdiction partitions: A survey of results and new directions," Journal of the New Economic Association, New Economic Association, vol. 54(2), pages 12-38.

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    More about this item

    Keywords

    Russia; stability; partitions; redistribution; core of a cooperative game;
    All these keywords.

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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