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Externalities vs Internalities: A Theory of Political Integration

Tore Ellingsen ()

No 63, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: Decentralized government lead to inter-regional externalities. Whereas an integratedjurisdiction solves the externality problem, centralized government entails other costs - in particular a neglect for minority interests. The paper models formally the trade-off between these two forces in determining the optimum as well as the equilibrium design of jurisdictions. Both the relative size of regions and the distribution of tastes are shown to be important parameters of the problem.

Keywords: Jurisdictions; integration; centralization; public goods; the State (search for similar items in EconPapers)
JEL-codes: H11 H73 (search for similar items in EconPapers)
Date: 1995-08
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Published in Journal of Public Economics, 1998, pages 251-268.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0063

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