Government and Cities: Contests and the Decentralization of Decision Making

Ira Gang and Gil Epstein

Departmental Working Papers from Rutgers University, Department of Economics

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: Economic-Models-of-the-Political-Process; fiscal federalism; Intergovernmental-Relations; rent-seeking (search for similar items in EconPapers)
JEL-codes: F22 (search for similar items in EconPapers)
Date: 2002-07-16
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Citations: View citations in EconPapers (6)

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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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Persistent link: https://EconPapers.repec.org/RePEc:rut:rutres:200215

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