The Impact of Referendums on the Centralisation of Public Goods Provision: A Political Economy Approach

Jan Schnellenbach, Lars Feld and Christoph Schaltegger

No 1803, CESifo Working Paper Series from CESifo

Abstract: The paper compares decision-making on the centralisation of public goods provision in the presence of regional externalities under representative and direct democratic institutions. A model with two regions, two public goods and regional spillovers is developed in which uncertainty over the true preferences of candidates makes strategic delegation impossible. Instead, it is shown that the existence of rent extraction by delegates alone suffices to make cooperative centralisation more likely through representative democracy. In the non-cooperative case, the more extensive possibilities for institutional design under representative democracy increase the likelihood of centralisation. Direct democracy may thus be interpreted as a federalism-preserving institution.

Keywords: centralisation; direct democracy; representative democracy; public good provision (search for similar items in EconPapers)
JEL-codes: D78 H73 H77 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Journal Article: The impact of referendums on the centralisation of public goods provision: a political economy approach (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1803

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