Decentralized Leadership

Emilson Silva

No 6064, CESifo Working Paper Series from CESifo

Abstract: This paper studies the efficiency of decentralized leadership in federations where selfish regional governments provide regional and federal public goods and the benevolent central government implements interregional earmarked and income transfers. Without residential mobility, unlimited decentralized leadership is efficient only if the center implements redistributive interregional income and earmarked transfers to equate consumption of private and regional public goods across regions. Such policies perfectly align the incentives of the selfish regional governments. With imperfect residential mobility, decentralized leadership is efficient if the center adopts redistributive interregional income and earmarked policies and there is a common labor market in the federation.

Keywords: decentralized leadership; earmarked transfers; common labor market; rotten kids (search for similar items in EconPapers)
JEL-codes: C72 D62 D72 D78 H41 H77 H87 Q28 R30 R50 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_6064

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