Decentralization of industrial policy as strategic delegation

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Volkswirtschaftliche Diskussionsreihe ; No. 193

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Trade Policy; International Trade Organizations ; Oligopoly and Other Imperfect Markets ; Industrial Policy; Sectoral Planning Methods
• Subject: Decentralization ; Strategic delegation ; Industrial policy ; Oligopoly

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Morasch, Karl
• Event: Veröffentlichung
• (who): Universität Augsburg, Institut für Volkswirtschaftslehre
• (where): Augsburg
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/70058
• Last update: 10.03.2025, 11:43 AM CET