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dc.contributor.authorRincke, Johannesen_US
dc.description.abstractA simple model of yardstick competition between jurisdictions is presented.Governments of jurisdictions face the alternative to choose between an oldand a new policy with stochastic payoffs. The new policy is superior to theold policy in one state of the world, and inferior in the other. Governmentsare either benevolent, serving the interest of the voter, or rent-seeking. Anequilibrium with yardstick competition is shown to exist where bad governments having a good government in their neighborhood choose the new policy more often compared to an equilibrium without relative performance evaluation. Overall, the probability of policy innovations is increased by yardstickcompetition. The model has a testable empirical implication saying that policy innovations should show spatial correlation.en_US
dc.publisher|aZentrum für Europäische Wirtschaftsforschung (ZEW) |cMannheimen_US
dc.relation.ispartofseries|aZEW Discussion Papers |x05-11en_US
dc.subject.stwYardstick Competitionen_US
dc.subject.stwPublic Choiceen_US
dc.titleYardstick Competition and Policy Innovationen_US
dc.typeWorking Paperen_US

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