Partial Fiscal Decentralization

Jan Brueckner

No 70804, Working Papers from University of California-Irvine, Department of Economics

Abstract: The fiscal decentralization impulse now sweeping the world often leads to partial decentralization, where subnational governments are funded by central transfers, rather than leading to full local autonomy. Despite the practical important of this arrangement, the literature contains no economic analysis of a partial decentralization regime in a Tiebout-style model. This paper provides such an analysis, relying on the key assumption that public-good provision requires effort on the part of government officials. By choosing different degrees of effort, localities can then provide different public-good levels even when a fixed, common transfer constrains them to spend the same amount. A number of useful results are derived.

Keywords: Decentralization; Tiebout (search for similar items in EconPapers)
JEL-codes: H0 H7 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2007-09
New Economics Papers: this item is included in nep-pbe and nep-ure
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https://www.economics.uci.edu/files/docs/workingpapers/2007-08/Brueckner-04.pdf (application/pdf)

Related works:
Journal Article: Partial fiscal decentralization (2009)
Working Paper: Partial Fiscal Decentralization (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:irv:wpaper:070804

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