Conspicuous Public Goods and Leadership Selection

Colin Jennings () and Hein Roelfsema ()

No 04-10, Working Papers from Utrecht School of Economics

Abstract: If voters care for the relative supply of public goods compared to other jurisdictions, decentralized provision of public goods will be too high. Potentially, centralization internalizes the negative externalities from the production of these `conspicuous' public goods. However, in a model of strategic delegation of policy making, we show that in the decentralized policy making case the median voter may delegate to a politician who cares less for conspicuous public goods than she does herself. By doing so, she commits to lower public goods in the home and in the foreign country. In contrast, with centralization the median voter anticipates the reduction in public goods supply by delegating to a policy maker who cares more for public goods than she does herself. This last effect mitigates the expected benefits of centralization.

Keywords: Conspicuous goods; strategic delegation; policy centralization (search for similar items in EconPapers)
JEL-codes: H21 H23 H41 F36 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
Date: 2004-01
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