Oates' Decentralization theorem with Imperfect Household Mobility

Francis Bloch and Ünal Zenginobuz ()

Post-Print from HAL

Abstract: This paper studies how Oates' trade-off between centralized and decentralized public good provision is affected by changes in households' mobility. We show that an increase in household mobility favors centralization. This results from two effects. First, mobility increases competition between jurisdictions in the decentralized régime, resulting in lower levels of public good provision. Second, while tyranny of the majority creates a gap between social welfare in different jurisdictions in the centralized régime, mobility allows agents to move to the majority jurisdiction, raising average social welfare. Our main result is obtained in a baseline model where jurisdictions first choose taxes, and households move in response to tax levels. We show that the result is robust to changes in the objective function and the strategic variable of local governments.

Keywords: Spillovers; Tax competition; Oates' decentralization theorem; Fiscal federalism; Household mobility (search for similar items in EconPapers)
Date: 2015-06
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Published in International Tax and Public Finance, 2015, 22 (3), pp.353-375. ⟨10.1007/s10797-014-9311-6⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Oates’ decentralization theorem with imperfect household mobility (2015)
Working Paper: Oates' Decentralization theorem with Imperfect Household Mobility (2015)
Working Paper: Oates' Decentralization theorem with Imperfect Household Mobility (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01012721

DOI: 10.1007/s10797-014-9311-6

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().