Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85876
Authors: 
Dur, Robert A.J.
Roelfsema, Hein J.
Year of Publication: 
2002
Series/Report no.: 
Tinbergen Institute Discussion Paper 02-056/3
Abstract: 
We provide an explanation why centralisation of political decision makingresults in overspending in some policy domains, whereas too low spending persists in others.We study a model in which delegates from jurisdictions bargain over local public goods provision.If all of the costs of public goods are shared through a common budget, policy makersdelegate bargaining to ‘public good lovers’, resulting in overprovision of public goods. If asufficiently large part of the costs can not be shared, underprovision persists because policymakers delegate bargaining to ‘conservatives’. We derive financing rules that eliminate theincentives for strategic delegation.
Subjects: 
Centralised decision making
strategic delegation
financing rules.
JEL: 
D72
D78
H11
H41
Document Type: 
Working Paper

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