Centralization and Political Accountability

CORE Discussion Paper No. 2004/52

39 Pages Posted: 22 Feb 2006

See all articles by Jean Hindriks

Jean Hindriks

University of London - School of Economics and Finance

Ben Lockwood

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

Date Written: July 15, 2004

Abstract

In this paper we abstract from the usual gains and costs of decentralization (e.g. preference matching, spillovers and economies of scale). Instead we compare the political accountability of decentralized governments relative to centralized ones when there is a risk of bad governance. We study both the selection and incentive effects of accountability. A key aspect of centralization is to make the politician answerable to multiple constituencies subject to a common budget constraint. Our main findings are that (a) when politicians differ in competence, decentralization unambiguously dominates; and (b) when politicians differ in honesty, decentraliza­tion and centralization have conflicting accountability effects (when one provides better discipline, the other gives better selection). The analysis then identifes the circumstances under which centralization may increase voter welfare. The more general lesson that we can draw is that different institutional forms give rise to different information to the voters on which electoral accountabiltiy can be based. Therefore they differ on how effective elections can be in disciplining and selecting policymakers.

Suggested Citation

Hindriks, Jean and Lockwood, Ben, Centralization and Political Accountability (July 15, 2004). CORE Discussion Paper No. 2004/52, Available at SSRN: https://ssrn.com/abstract=883582 or http://dx.doi.org/10.2139/ssrn.883582

Jean Hindriks (Contact Author)

University of London - School of Economics and Finance ( email )

Mile End Road
London, E1 4NS
United Kingdom
+44 20 7882 7807 (Phone)
+44 20 8983 3580 (Fax)

HOME PAGE: http://www.dc.eclipse.co.uk/hindriks.html

Ben Lockwood

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
115
Abstract Views
973
rank
284,372
PlumX Metrics