Endogenous public sector budgeting: to centralize or not?

Gervan Fearon

Canadian Journal of Economics, 2001, vol. 34, issue 2, 504-524

Abstract: In this paper the impact of budget size on a government's choice to centralize or decentralize the budgetary process is investigated using asymmetric information, differing preferences, and endogenous budgetary arrangements. The central government chooses between a budgetary process that excludes the regional board (centralization) and one that includes the board (decentralization) in the determination of program budget levels. It is predicted that the central government will decentralize the budgetary process at low and centralize at high overall budget levels. Switching from decentralization to centralization is predicted to result in a reduction in the budget allocated to the regional board.

JEL-codes: C7 H3 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (2)

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