IDEAS home Printed from https://ideas.repec.org/p/uto/dipeco/201703.html
   My bibliography  Save this paper

Decentralization in Heterogeneous Regions: A Biased Technological Change Approach

Author

Listed:

Abstract

Regional heterogeneity plays a determinant role in both the decentralization and the biased technological change literature. Merging these perspectives, this paper offers a novel approach on how productivity of firms can be affected by public policies within centralized and decentralized political systems. The contribution of this paper is to develop a theoretical model that introduces the biased technological change concept instead of the traditional Total Factor Productivity (TFP) to evaluate policy outcomes. By doing so, we find that public policies may not always have the expected effect in terms of effciency. In our model, productivity and effciency will depend on the level of regional heterogeneity, the inter-regional spillovers and the relative amount of regional endowments. In particular, our point argues that if there is regional heterogeneity but no inter-regional spillovers a centralized policy can be effcient and that if regions are homogeneous in the presence of inter-regional spillovers, a decentralized strategy can be effcient too. Last, we find that there are cases that may reach no effcient outcomes, regardless the political system.

Suggested Citation

  • Feder, Christophe & Kataishi, Rodrigo Ezequiel, 2017. "Decentralization in Heterogeneous Regions: A Biased Technological Change Approach," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201703, University of Turin.
  • Handle: RePEc:uto:dipeco:201703
    as

    Download full text from publisher

    File URL: http://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2017dip/wp_3_2017.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416-416.
    2. Antonelli, Cristiano, 2006. "Localized technological change and factor markets: constraints and inducements to innovation," Structural Change and Economic Dynamics, Elsevier, vol. 17(2), pages 224-247, June.
    3. George W. Hammond & Mehmet S. Tosun, 2011. "The Impact Of Local Decentralization On Economic Growth: Evidence From U.S. Counties," Journal of Regional Science, Wiley Blackwell, vol. 51(1), pages 47-64, February.
    4. Hikaru Ogawa & David E. Wildasin, 2009. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," American Economic Review, American Economic Association, vol. 99(4), pages 1206-1217, September.
    5. Antonio Accetturo & Alberto Dalmazzo & Guido Blasio, 2014. "Skill Polarization In Local Labor Markets Under Share-Altering Technical Change," Journal of Regional Science, Wiley Blackwell, vol. 54(2), pages 249-272, March.
    6. Marcus Berliant & Chia-Ming Yu, 2015. "Locational Signaling And Agglomeration," Journal of Regional Science, Wiley Blackwell, vol. 55(5), pages 757-773, November.
    7. Bodman, Philip & Campbell, Harry & Le, Thanh, 2012. "Public investment, taxation, and long-run output in economies with multi-level governments," Economic Modelling, Elsevier, vol. 29(5), pages 1603-1611.
    8. Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
    9. Oliver Lorz & Gerald Willmann, 2013. "Size versus scope: on the trade-off facing economic unions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(2), pages 247-267, April.
    10. Besley, Timothy & Coate, Stephen, 2003. "Centralized versus decentralized provision of local public goods: a political economy approach," Journal of Public Economics, Elsevier, vol. 87(12), pages 2611-2637, December.
    11. Lockwood, Ben, 2005. "Fiscal Decentralization: A Political Economy Perspective," Economic Research Papers 269615, University of Warwick - Department of Economics.
    12. Hikaru Ogawa & David E. Wildasin, 2009. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," American Economic Review, American Economic Association, vol. 99(4), pages 1206-1217, September.
    13. Roberta Capello & Camilla Lenzi, 2013. "Territorial Patterns of Innovation and Economic Growth in European Regions," Growth and Change, Wiley Blackwell, vol. 44(2), pages 195-227, June.
    14. Cristiano Antonelli & Federico Barbiellini Amidei & Christophe Feder, 2017. "Directed technological change and productivity growth: the Italian evidence 1861-2010," International Journal of Computational Economics and Econometrics, Inderscience Enterprises Ltd, vol. 7(3), pages 238-255.
    15. Daron Acemoglu, 2015. "Localised and Biased Technologies: Atkinson and Stiglitz's New View, Induced Innovations, and Directed Technological Change," Economic Journal, Royal Economic Society, vol. 0(583), pages 443-463, March.
    16. Christophe Feder, 2018. "A measure of total factor productivity with biased technological change," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 27(3), pages 243-253, April.
    17. Heike Belitz & Alexander Eickelpasch & Anna Lejpras, 2010. "Technologieoffene Förderung: zentrale Stütze der Industrieforschung in Ostdeutschland," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 77(51/52), pages 2-10.
    18. Marco Alderighi & Christophe Feder, 2014. "Political competition, power allocation and welfare in unitary and federal systems," Working Paper series 23_14, Rimini Centre for Economic Analysis.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christophe Feder, 2018. "Smart Specialization Strategy and Directed Technological Change," Economics Bulletin, AccessEcon, vol. 38(3), pages 1428-1437.
    2. Feder, Christophe, 2018. "The effects of disruptive innovations on productivity," Technological Forecasting and Social Change, Elsevier, vol. 126(C), pages 186-193.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uto:dipeco:201703. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Piero Cavaleri) or (Marina Grazioli). General contact details of provider: http://edirc.repec.org/data/detorit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.