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Asymmetric yardstick competition and municipal cooperation

Michele Giuranno and Giuseppe Di Liddo

POLIS Working Papers from Institute of Public Policy and Public Choice - POLIS

Abstract: 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
Date: 2015-11
New Economics Papers: this item is included in nep-cdm and nep-reg
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Citations: View citations in EconPapers (1) Track citations by RSS feed

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Journal Article: Asymmetric yardstick competition and municipal cooperation (2016) Downloads
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