Centralization and accountability: Theory and evidence from the Clear Air Act

Federico Boffa, Giacomo Ponzetto and Amedeo Piolatto

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper studies fiscal federalism when voter information varies across regions. We develop a model of political agency with heterogeneously informed voters. Rent-seeking politicians provide public goods to win the votes of the informed. As a result, rent extraction is lower in regions with higher information. In equilibrium, electoral discipline has decreasing returns. Thus, political centralization reduces aggregate rent extraction. When the central government provides public goods uniformly across space, the model predicts that a region’s benefits from centralization are decreasing in its residents’ information. We test this prediction using panel data on pollutant emissions and newspaper circulation across the United States. The 1970 Clean Air Act centralized environmental policy at the federal level. In line with our theory, we find that centralization induced a faster decrease in pollution in less informed states.

Keywords: Political centralization; Government accountability; Imperfect information; Interregional heterogeneity; Elections; Environmental policy; Air pollution. (search for similar items in EconPapers)
JEL-codes: D72 D82 H73 H77 Q58 (search for similar items in EconPapers)
Pages: 75 pages
Date: 2013-04
New Economics Papers: this item is included in nep-cdm, nep-cta, nep-ene, nep-env, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published by Ivie

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http://www.ivie.es/downloads/docs/wpasad/wpasad-2013-03.pdf Fisrt version / Primera version, 2013 (application/pdf)

Related works:
Journal Article: Political Centralization and Government Accountability (2016)
Working Paper: Should Different People Have Different Governments? (2015)
Working Paper: Should Different People Have Different Governments? (2015)
Working Paper: Should Different People Have Different Governments? (2015)
Working Paper: Political centralization and government accountability (2015)
Working Paper: Centralization and Accountability: Theory and Evidence from the Clean Air Act (2013)
Working Paper: Centralization and Accountability: Theory and Evidence from the Clean Air Act (2012)
Working Paper: Centralization and accountability: theory and evidence from the Clean Air Act (2012)
Working Paper: Centralization and Accountability: Theory and Evidence from the Clean Air Act (2012)
Working Paper: Centralization and Accountability: Theory and Evidence from the Clean Air Act (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2013-03

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