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Unequal Provision of Local Public Services under the Threat of Secession

  • Brink , Anna

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

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    This paper studies to what extent it is possible to discriminate between two municipality parts by unequal public service provision when there is a threat of secession. The objective of the local politicians is to maximize utility for only one part of a municipality. The discriminated part is small and politically marginalized, but has the option to secede. The power of the small part's population is in this way entirely exercised through the threat of secession. It becomes their guarantee against being taxed too heavily or against obtaining too little of public services. The case of three recent secession attempts in Göteborg, Sweden, is discussed in light of the model.

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    File URL: http://hdl.handle.net/2077/2830
    Download Restriction: no

    Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 103.

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    Length: 19 pages
    Date of creation: 05 Sep 2003
    Date of revision:
    Handle: RePEc:hhs:gunwpe:0103
    Contact details of provider: Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
    Phone: 031-773 10 00
    Web page: http://www.handels.gu.se/econ/

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    1. Alesina, Alberto & Spolaore, Enrico, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1027-56, November.
    2. Bolton, Patrick & Roland, Gérard, 1995. "The Break up of Nations: A Political Economy Analysis," CEPR Discussion Papers 1225, C.E.P.R. Discussion Papers.
    3. Ellingsen, Tore, 1998. "Externalities vs internalities: a model of political integration," Journal of Public Economics, Elsevier, vol. 68(2), pages 251-268, May.
    4. Perotti, Roberto & Spolaore, Enrico & Alesina, Alberto, 1995. "Together or Separately? Issues on the Costs and Benefits of Political and Fiscal Unions," Scholarly Articles 4553017, Harvard University Department of Economics.
    5. Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-31, December.
    6. Bolton, Patrick & Roland, Gerard & Spolaore, Enrico, 1996. "Economic theories of the break-up and integration of nations," European Economic Review, Elsevier, vol. 40(3-5), pages 697-705, April.
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