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Governance choice on a serial network

  • Feng Xie
  • David Levinson

    ()

    (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)

This paper analyzes governance choice in a two-level federation in providing road infrastructure across jurisdictions. Two models are proposed to predict the choice of centralized or decentralized spending structure on a serial road network shared by two districts. While the first model considers simple Pigouvian behavior of governments, the second explicitly models political forces at both a local and central level. Both models led to the conclusions that the spending structure is chosen based on a satisfactory comprise between benefits and costs associated with alternative decision-making processes, and that governance choice may spontaneously shift as the infrastructure improves temporally.

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File URL: http://nexus.umn.edu/Papers/GovernanceChoice.pdf
File Function: First version, 2009
Download Restriction: no

Paper provided by University of Minnesota: Nexus Research Group in its series Working Papers with number 200904.

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Date of creation: 2009
Date of revision:
Publication status: Published in Public Choice 141:189-212, doi:10.1007/s11127-009-9448-5
Handle: RePEc:nex:wpaper:governancechoice
Contact details of provider: Postal: Dept. of Civil Engineering, 500 Pillsbury Drive SE, Minneapolis, MN 55455
Phone: +01 (612) 625-6354
Fax: +01 (612) 626-7750
Web page: http://nexus.umn.edu

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  1. Lei Zhang & David Levinson, 2006. "The Economics of Transportation Network Growth," Working Papers 200710, University of Minnesota: Nexus Research Group.
  2. Redoano, Michela & Scharf, Kimberly A., 2004. "The political economy of policy centralization: direct versus representative democracy," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 799-817, March.
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  5. Bogart, Dan, 2005. "Turnpike Trusts, Infrastructure Investment, and the Road Transportation Revolution in Eighteenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 65(02), pages 540-543, June.
  6. Hessel Oosterbeek & Randolph Sloof & Gijs van de Kuilen, 2004. "Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis," Experimental Economics, Springer, vol. 7(2), pages 171-188, 06.
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  11. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135.
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  14. Lorz, Jens Oliver & Willmann, Gerald, 2004. "On the Endogenous Allocation of Decision Powers in Federal Structures," Center for European, Governance and Economic Development Research Discussion Papers 25, University of Goettingen, Department of Economics.
  15. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
  16. David Levinson & Bhanu Yerra, 2002. "Highway Costs and the Efficient Mix of State and Local Funds," Working Papers 200205, University of Minnesota: Nexus Research Group.
  17. Epple, Dennis & Nechyba, Thomas, 2004. "Fiscal decentralization," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 55, pages 2423-2480 Elsevier.
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