Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127261
Authors: 
Schnellenbach, Jan
Feld, Lars
schaltegger, Christoph
Year of Publication: 
2007
Series/Report no.: 
Discussion Paper Series, University of Heidelberg, Department of Economics 440
Abstract: 
The paper compares decision-making on the centralisation of public goods provision in the presence of regional externalities under representative and direct democratic institutions. A model with two regions, two public goods and regional spillovers is developed in which uncertainty over the true preferences of candidates makes strategic delegation impossible. Instead, it is shown that the existence of rent extraction by delegates alone suffices to make cooperative centralisation more likely through representative democracy. In the non-cooperative case, the more extensive possibilities for institutional design under representative democracy increase the likelihood of centralisation. Direct democracy may thus be interpreted as a federalism-preserving institution.
Subjects: 
centralisation
direct democracy
representative democracy
public good provision
JEL: 
H11
H77
H72
H73
Document Type: 
Working Paper

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