Fiscal Decentralization: A Political Economy Perspective
Ben Lockwood ()
The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics
This paper surveys recent contributions to the study of fiscal decentralization which adopt a political economy approach. It is argued that this approach can capture, in a variety of formal models, the plausible and influential ideas (increasingly, supported by empirical evidence) that fiscal decentralization can lead to improved preference-matching and accountability of government. In particular, recent work on centralized provision of public good provision via bargaining in a legislature shows how centralization reduces preference-matching, and recent work using "electoral agency" models formalizes the accountability argument. These models also provide insights into when decentralization may fail to deliver these benefits.
Keywords: Fiscal decentralization; political economy; local public goods (search for similar items in EconPapers)
JEL-codes: H41 H70 H72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe, nep-pol and nep-ure
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Working Paper: Fiscal Decentralization: A Political Economy Perspective (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:721
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