Government and Cities: Contests and the Decentralization of Decision Making

Gil Epstein and Ira Gang

No 547, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Governments do not have perfect information regarding the priorities and the needs of different groups in the economy. This lack of knowledge opens the door for different groups to lobby the government in order to receive the government’s support. We set up a model of hierarchical contests and compare the implications of a centralized allocation process with a decentralized allocation process. We show the potential existence of a poverty trap as a result of fiscal federalism.

Keywords: fiscal federalism; economic models of political processes; contests; rentseeking; intergovernmental relations; interjurisdictional differentials and their effects (search for similar items in EconPapers)
JEL-codes: D72 H73 H77 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2002-08
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Government and Cities: Contests and the Decentralization of Decision Making (2002)
Working Paper: Government and Cities: Contests and the Decentralization of Decision Making (2002)
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