The Assignment of Powers in Federal and Unitary States

No 269340, Economic Research Papers from University of Warwick - Department of Economics

Abstract: This paper studies a model where the power to set policy (a choice of project) may be assigned to central or regional government via either a federal or unitary referendum (constitutional rule, CR). The bene…t of central provision is an economy of scale, while the cost is political ine¢- ciency. The relationship between federal and unitary CRs is characterized in the asymptotic case as the number of regions becomes large, under the assumption that the median project bene…t in any region is a random draw from a …xed distribution, G: Under some symmetry assumptions, the relationship depends only on the shape of G; not on how willingnesses to pay are distributed within regions. The relationship to Cremer and Palfrey’s (1996) “principle of aggregation” is established. Asymptotic results on the e¢ciency of the two CRs are also proved.

Keywords: Agricultural and Food Policy; Political Economy (search for similar items in EconPapers)
Pages: 34
Date: 2000-06-06
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: THE ASSIGNMENT OF POWERS IN FEDERAL AND UNITARY STATES (2000)
Working Paper: The Assignment of Powers in Federal and Unitary States (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwarer:269340

DOI: 10.22004/ag.econ.269340

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