Asymmetric yardstick competition and municipal cooperation
Michele Giuranno and
Giuseppe Di Liddo
POLIS Working Papers from Institute of Public Policy and Public Choice - POLIS
This paper addresses the issue of inter-jurisdictional cooperation when incumbents are pure rent seekers. Asymmetric fiscal needs bias yardstick competition as in Allers (2012). While incumbents gain control over the political yardstick competition by cooperating, this bias leads to asymmetric rent share. Cooperation is also intrinsically unstable. Furthermore, incentives, such as matching grants or economies of scale, may enhance cooperation, but will not increase political accountability.
Keywords: Decentralization; expenditure needs disparities; municipal cooperation. (search for similar items in EconPapers)
JEL-codes: D72 H77 (search for similar items in EconPapers)
Pages: 10 pages
New Economics Papers: this item is included in nep-cdm and nep-reg
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Journal Article: Asymmetric yardstick competition and municipal cooperation (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:uca:ucapdv:180
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