Fiscal federalism and electoral accountability

Arbeitspapier

We study the efficient allocation of spending and taxation authority in a federation in which federal politicians are exposed to electoral uncertainty. We show that centralization may, but need not, result in a loss of electoral accountability. We identify an important asymmetry between positive and negative externalities and show that centralization may not be efficient in economies with positive externalities even when regions are identical and centralization does not entail a loss of accountability. We also show that decentralization can only Pareto dominate centralization in economies with negative externalities.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 3022

Classification and Topics

• Classification: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Positive Analysis of Policy Formulation and Implementation ; Public Goods
• Subject: fiscal federalism ; local public goods ; externalities ; performance voting ; turnout uncertainty ; electoral accountability ; Finanzföderalismus ; Lokales öffentliches Gut ; Externer Effekt ; Wiederwahl ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Aidt, Toke ; Dutta, Jayasri
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/38972
• Last update: 10.03.2025, 11:42 AM CET