Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70058
Authors: 
Morasch, Karl
Year of Publication: 
2000
Series/Report no.: 
Volkswirtschaftliche Diskussionsreihe, Institut für Volkswirtschaftslehre der Universität Augsburg 193
Abstract: 
What is the appropriate degree of centralization in the context of industrial policy? The basic advantage of centralization results from internalization of external effects. While most of the literature stresses the superior information of regional authorities as a countervailing force, the present paper discusses another argument in favor of decentralization: Delegation of authority to regional governments will improve the position of the home country in the policy game with a foreign government. In a linear Cournot oligopoly with two domestic regions delegation is shown to be profitable if the domestic industry comprises at least twice as many firms as the foreign industry.
Subjects: 
Decentralization
Strategic delegation
Industrial policy
Oligopoly
JEL: 
D43
F13
L13
L52
Document Type: 
Working Paper

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