On the incentives to experiment in federations

Arbeitspapier

Conventional wisdom has it that policy innovation is better promoted in a federal rather than in a unitary system. Recent research, however, has provided theoretical evidence to the contrary: a multi-jurisdictional system is characterized - due to the existence of a horizontal information externality - by under-provision of policy innovation. This paper presents a simple model that introduces political competition for federal office. Under such competition political actors use the innovative policies in order to signal ability to the electorate. In the equilibrium analyzed policy innovation may occur more frequently than in a unitary system. It is thus shown that, once electoral motives are accounted for, the conventional wisdom is likely to be a valid proposition.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 1585

Classification and Topics

• Classification: Wirtschaft ; Intergovernmental Relations; Federalism; Secession ; Regional Government Analysis: Other
• Subject: fiscal federalism ; policy innovation ; policy experimentation ; Föderalismus ; Politik ; Innovation ; Public Choice ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kotsogiannis, Christos ; Schwager, Robert
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/19049
• Last update: 10.03.2025, 11:43 AM CET