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Partial decentralisation and inter-governmental electoral competition in local public good provision

Marco Catola

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: Over the last few years, the literature on partial decentralisation has largely grown, pointing out that one of its effects is a reduction in accountability because voters are imperfectly informed about each government contribution. However, the possibility for politicians to directly manipulate this asymmetry in information has not been addressed yet. This paper provides a simple model in which two levels of government are involved in the provision of a local public good with the local government that can decide to spend its budget either on the provision of the public good or in spending that influences the information of the voters in its favour. A central result is that the conflict of interest that arises among the levels of government reduces the spending in the public good at both levels, while it generates a wasteful spending to pander to voters.

Keywords: partial decenstralisation; party alignment; accountability; intergovernmental transfers (search for similar items in EconPapers)
JEL-codes: D72 H72 H77 (search for similar items in EconPapers)
Date: 2019-06-01
New Economics Papers: this item is included in nep-cdm, nep-pol, nep-pub and nep-ure
Note: ISSN 2039-1854
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