Is it reasonable to allocate power to appointed regional authorities?
No 04-2009, Working Papers from Departamento de Economía, Universidad de Concepción
Political decentralization involves an incentive game in which the President and regional authorities have to share power to provide public goods. In such a game, it is never reasonable to allocate political power to appointed Governors. In fact, when formal authority goes to the President —i.e. under administrative decentralization—, the maximization of the expected public good provision lead to allocate no real authority to Governors. In other words, mere delegation does not exist because regional incentives are not high enough. On the other hand, if formal authority is given to regions —i.e. under democratic decentralization where regional authorities are elected—, Governors may receive some real authority if their incentives are high enough. Additionally, other results of the model say that communication between regions makes the President more accountable and may revert a decentral allocation made under no communication. Finally, asymmetric regions prefer different power allocations and power concerns lead national politicians to avoid proposing decentralizing reforms.
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