Centralized versus Decentralized Provision of Local Public Goods: A Political Economy Analysis / Timothy Besley, Stephen Coate.

Format:

Book

Author/Creator:

Besley, Timothy.

Contributor:

National Bureau of Economic Research.

Coate, Stephen.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7084.

NBER working paper series no. w7084

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Centralized versus Decentralized Provision of Local Public Goods

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

This paper takes a fresh look at the trade-off between centralized and decentralized provision of local public goods. The point of departure is to model a centralized system as one in which public spending is financed by general taxation, but districts can receive different levels of local public goods. In a world of benevolent governments, the disadvantages of centralization stressed in the existing literature disappear, suggesting that the case for decentralization must be driven by political economy considerations. Our political economy analysis assumes that under decentralization public goods are selected by locally elected representatives, while under a centralized system policy choices are determined by a legislature consisting of elected representatives from each district. We then study the role of taste heterogeneity, spillovers and legislative behavior in determining the case for centralization.

Notes:

Print version record

April 1999.