Political Accountability and Fiscal Federalism

Santanu Gupta ()

International Tax and Public Finance, 2001, vol. 8, issue 3, 263-280

Abstract: In a model with democratic institutions and three jurisdictions, we study the allocation and welfare in a one-level (unitary) and a two-level (federal) government, given that the central government finds it optimal to discriminate in favor of two jurisdictions and against the third. Favored jurisdictions are at least as well off in a unitary structure as compared to a federal one, while this may not be so for the jurisdiction discriminated against. We finally show that jurisdiction-specific electoral uncertainty is consistent with both equitable as well as discriminating allocations. Copyright Kluwer Academic Publishers 2001

Keywords: public good; discrimination; efficiency (search for similar items in EconPapers)
Date: 2001
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DOI: 10.1023/A:1011212106226

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