Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253489 
Year of Publication: 
2021
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 16 [Issue:] 2 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2021 [Pages:] 425-448
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We analyze a model of moral hazard in local public services which could be efficiently managed by officials under local democratic accountability, but not by officials who are appointed by the ruler of a centralized autocracy. The ruler might prefer to retain an official who diverted resources from public services but contributed part to benefit the ruler. The autocratic ruler would value better public services only when residents reduce taxable investments which become unprofitable without good public services. For local government to benefit local residents, they must have some decentralized power to punish an official who serves them badly even while serving the ruler well
Subjects: 
Local public goods
moral hazard
decentralized democracy
centralized autocracy
JEL: 
D72
H41
H70
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.