Government and Cities: Contests and the Decentralization of Decision Making

30 Pages Posted: 30 Aug 2002

See all articles by Gil S. Epstein

Gil S. Epstein

Bar-Ilan University - Department of Economics; IZA Institute of Labor Economics; University College London - CReAM - Centre for Research and Analysis of Migration

Ira N. Gang

Rutgers University - Economics Department; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 2002

Abstract

Governments do not have perfect information regarding the priorities and the needs of different groups in the economy. This lack of knowledge opens the door for different groups to lobby the government in order to receive the government's support. We set up a model of hierarchical contests and compare the implications of a centralized allocation process with a decentralized allocation process. We show the potential existence of a poverty trap as a result of fiscal federalism.

Keywords: Fiscal Federalism, Economic Models of Political Processes, Contests, Rentseeking, Intergovernmental Relations, Interjurisdictional Differentials and Their Effects

JEL Classification: H77, D72, H73

Suggested Citation

Epstein, Gil S. and Gang, Ira N., Government and Cities: Contests and the Decentralization of Decision Making (August 2002). IZA Discussion Paper No. 547. Available at SSRN: https://ssrn.com/abstract=323602

Gil S. Epstein

Bar-Ilan University - Department of Economics ( email )

Ramat-Gan, 52900
Israel
+972 3 531 8937 (Phone)
+972 3 535 3180 (Fax)

HOME PAGE: http://faculty.biu.ac.il/~epsteig/

IZA Institute of Labor Economics ( email )

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University College London - CReAM - Centre for Research and Analysis of Migration ( email )

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Ira N. Gang (Contact Author)

Rutgers University - Economics Department ( email )

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New Brunswick, NJ 08901-1248
United States
732-932-7363 (Phone)
732-932-7416 (Fax)

HOME PAGE: http://econweb.rutgers.edu/gang/research

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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