Selective Decentralized Leadership

34 Pages Posted: 22 Oct 2013

See all articles by Emilson Delfino Silva

Emilson Delfino Silva

University of Alberta - Department of Marketing, Business Economics & Law

Date Written: October 19, 2013

Abstract

In a federation with decentralized leadership, many regional governments provide multiple types of public goods and the center implements interregional income transfers. The symmetric perfect equilibrium under unlimited decentralized leadership is inefficient because regional public goods are overprovided. Symmetric perfect equilibria under selective decentralized leadership are socially efficient if regional governments restrict commitments to policies that regulate the provision of some types of public goods that generate interregional consumption spillovers. The efficiency result holds even when regional governments provide impure national public goods if the center possesses matching grants and the matching occurs after regional contributions of such public goods.

Keywords: policy commitments, multiple public goods, federations, decentralized leadership

JEL Classification: C72, D62, D72, D78, H41, H77, Q28

Suggested Citation

Delfino Silva, Emilson, Selective Decentralized Leadership (October 19, 2013). University of Alberta School of Business Research Paper No. 2013-1317. Available at SSRN: https://ssrn.com/abstract=2343231 or http://dx.doi.org/10.2139/ssrn.2343231

Emilson Delfino Silva (Contact Author)

University of Alberta - Department of Marketing, Business Economics & Law ( email )

Edmonton, Alberta T6G 2R6
Canada

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