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Partial Fiscal Decentralization

Author

Listed:
  • Jan K. Brueckner

    (Department of Economics, University of California-Irvine)

Abstract

The fiscal decentralization impulse now sweeping the world often leads to partial decentralization, where subnational governments are funded by central transfers, rather than leading to full local autonomy. Despite the practical important of this arrangement, the literature contains no economic analysis of a partial decentralization regime in a Tiebout-style model. This paper provides such an analysis, relying on the key assumption that public-good provision requires effort on the part of government officials. By choosing different degrees of effort, localities can then provide different public-good levels even when a fixed, common transfer constrains them to spend the same amount. A number of useful results are derived.

Suggested Citation

  • Jan K. Brueckner, 2007. "Partial Fiscal Decentralization," Working Papers 070804, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:070804
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    JEL classification:

    • H0 - Public Economics - - General
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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