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http://hdl.handle.net/10419/22152
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| Title: | | On the Endogenous Allocation of Decision Powers in Federal Structures  |
| Authors: | | Lorz, Jens Oliver Willmann, Gerald |
| Issue Date: | | 2004 |
| Series/Report no.: | | CeGE discussion paper 25 |
| Abstract: | | This paper provides a political-economy explanation of the degree of centralization in economic policy making. To determine which policies are to be centralized, regions select representatives who then negotiate the degree of centralization and the regional cost shares of centrally decided policies. We show that the resulting degree of centralization is suboptimally low. Voters strategically delegate to representatives who are averse to public spending and hence prefer decentralized decisions in order to reduce their region's cost share. When spillovers are asymmetric, strategic delegation is stronger at the periphery than at the center. |
| Subjects: | | Political Economy Fiscal Federalism Endogenous Centralization Constitutional Design |
| JEL: | | H77 H11 H41 |
| Document Type: | | Working Paper |
| Appears in Collections: | | cege-Diskussionspapiere, Universität Göttingen
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| lorz_25.pdf | | 205.67 kB | Adobe PDF |
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