The Stability of Multi-Level Governments

Clara Ponsatí and Enriqueta Aragonès
Authors registered in the RePEc Author Service: Clara Ponsati

No 1109, Working Papers from Barcelona School of Economics

Abstract: This paper studies the stability of a multi-level government. We analyze an extensive form game played between two politicians leading two levels of government. We characterize the conditions that render such government structures stable. We also show that if leaders care about electoral rents and the preferences of the constituencies at different levels are misaligned, then the decentralized government structure may be unsustainable. This result is puzzling because, from a normative perspective, the optimality of decentralized decisions via a multi-level government structure is relevant precisely when different territorial constituencies exhibit preference heterogeneity.

Keywords: multi-level governments; repression (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1109

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