Why does centralisation fail to internalise policy externalities?

Robert Dur () and Hein Roelfsema ()

Public Choice, 2005, vol. 122, issue 3, pages 395-416

Abstract: We provide an explanation why centralisation of political decision making results in overspending in some policy domains, whereas too low spending persists in others. We study a model in which delegates from jurisdictions bargain over local public goods provision. If all of the costs of public goods are shared through a common budget, policy makers delegate bargaining to ‘public good lovers’, resulting in overprovision of public goods. If a sufficiently large part of the costs can not be shared, underprovision persists because policy makers delegate bargaining to ‘conservatives’. We derive financing rules that eliminate the incentives for strategic delegation. Copyright Springer Science + Business Media, Inc. 2005

Date: 2005
View list of references View citations in EconPapers

Downloads: (external link)
http://hdl.handle.net/10.1007/s11127-005-5290-6 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Why does Centralisation Fail to Internalise Policy Externalities? (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:kap:pubcho:v:122:y:2005:i:3:p:395-416

Access Statistics for this article

Public Choice is edited by Charles K. Rowley, WIlliam F. Shughart and Robert D. Tollison

More articles in Public Choice from Springer
Series data maintained by Christopher F. Baum ().