The Organization of Public Service Provision
Working Papers from Georgetown University, Department of Economics
This paper addresses the question of how the responsibility for the delivery of social services, including health, education, and welfare programs, should be divided between state and central governments. We combine a random voting model and the incomplete contracts paradigm to formalize the trade off between central and state responsibility for service delivery, and find that authority should rest with the party for whom the marginal impact of the service on re-election chances is greater. This in turn means that, other things equal, states with lower than average health, education, or welfare status should be given responsibility for service delivery, while authority in states with above average indicators should reside with the central government. Also, we show that there is no presumption that states that are given authority for service delivery should necessarily be granted expanded tax authority.
Keywords: public service provision; political economy; random voting; incomplete contracts (search for similar items in EconPapers)
JEL-codes: D7 H4 H7 (search for similar items in EconPapers)
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Journal Article: The Organization of Public Service Provision (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:geo:guwopa:gueconwpa~03-03-14
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Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
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