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Title:The political economy of the standard level of services: The role of income distribution PDF Logo
Authors:Fiorillo, Fabio
Sacchi, Agnese
Issue Date:2012
Series/Report no.:CESifo working paper: Public Finance 3696
Abstract:The theory of fiscal federalism points out that decentralisation should be pursued in order to fit differences in individual preferences. However, the presence of externalities and the need of providing merit goods to citizens suggest that centralisation is likely to produce more efficient results. Moreover, in a political economy framework, each decision - including the possibility to fix a standard level of services - mainly depends on the objective function of the policymakers. Adopting this approach, the aim of this paper is to compare the individual convenience of a common standard level defined under a centralised system versus different provisions of public services when decisions are decentralised. Income heterogeneity across individuals is assumed.
Subjects:standard level of services
income concentration
decentralization
cooperative legislature
JEL:H70
H73
D31
D78
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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