Distributive Politics and the Cost of Decentralization

CEPR Working Paper No. 2046

Posted: 25 Jan 2000

See all articles by Ben Lockwood

Ben Lockwood

University of Warwick - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 1998

Abstract

This paper integrates the distributive politics literature with the literature on decentralization by incorporating inter-regional project externalities into a standard model of distributive policy. A key finding is that the degree of uniformity (or 'universalism') of the provision of regional projects is endogenous and depends on the strength of the externality. The efficiency of decentralization and the performance of 'constitutional rules' (such as majority voting) which may be used to choose between decentralization and centralization are then discussed in this framework. Stronger externalities and more heterogeneity between regions need not imply that decentralization becomes more efficient.

JEL Classification: H41, H70, H72

Suggested Citation

Lockwood, Ben, Distributive Politics and the Cost of Decentralization (December 1998). CEPR Working Paper No. 2046, Available at SSRN: https://ssrn.com/abstract=142790

Ben Lockwood (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom
+44 24 7652 8906 (Phone)
+44 24 7657 2548 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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