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Constitutional Design and Regional Favoritism

Author

Listed:
  • Zantiman, W.

Abstract

Using a Principal-Agent framework, this paper analyzes a public good provision problem in which a central government tries to favor one of the regions or political reasons. We show how this favoritism leads the government to distort the allocation scheme compared to the benevolent case. We then study the effects of decentralization, modeled by here by giving some outside options to the regions. We exhibit a tradeoff between rent and equality and put in question the general idea that decentralization could be a solution to regional favoritism.

Suggested Citation

  • Zantiman, W., 1999. "Constitutional Design and Regional Favoritism," Papers 99.529, Toulouse - GREMAQ.
    • Handle: RePEc:fth:gremaq:99.529
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    More about this item

    Keywords

    PUBLIC GOODS ; SOCIAL CHOICE ; CONTRACTS;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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