Inefficiency and Self-Determination: Simulation-based evidence from Meiji Japan

Eric Weese, Masayoshi Hayashi and Masashi Nishikawa
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Masashi Nishikawa: Aoyama Gakuin University

No 1627, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: We consider a model in which the arrangement of political boundaries involves a tradeoff between efficiencies of scale and geographic heterogeneity. If jurisdiction formation is decentralized, we show how mixed integer programming can be used to calculate core partitions via a sequence of myopic deviations. Using historical data from Japan regarding a set of centralized boundary changes, we estimate parameters using moment inequalities and find that core partitions always exist. In a counterfactual world in which there are no between-village income differences, these core partitions are extremely close to the partition that would be chosen by a utilitarian central planner. When actual cross-village income differences are used, however, sorting on income results in mergers that are both smaller and geographically bizarre.

Pages: 121 pages
Date: 2016-09
New Economics Papers: this item is included in nep-cmp
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http://www.econ.kobe-u.ac.jp/RePEc/koe/wpaper/2016/1627.pdf

Related works:
Working Paper: Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan (2015)
Working Paper: Inefficiency and Self-Determination: Simulation-Based Evidence From Meiji Japan (2015)
Working Paper: Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan (2015)
Working Paper: Inefficiency and Self-Determination: Simulation-based Evidence from Meiji Japan (2015)
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