Rent-seeking, spillovers and the benefits of decentralization

Guillaume Cheikbossian

Journal of Urban Economics, 2008, vol. 63, issue 1, 217-228

Abstract: In the presence of spillovers, decentralized provision of local public goods may lead to a higher surplus than centralized provision even though localities have identical preferences. Indeed, free-riding costs associated to decentralization can be lower than the costs of rent-seeking and influence activities under centralization. Actually, centralization yields a higher level of regional surplus only if both the spillover effect from local public spending is sufficiently large and the elasticity of the influence function is sufficiently small.

Keywords: (De)centralization; Local; public; goods; Rent-seeking; Spillovers (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (27)

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