Institutional design, political competition and spillovers

We establish a link between the best system of government and the strength of inter-state spillovers within a model of political competition with self-interested parties. We show the superiority of the unitary system when: inter-state spillovers are strong; the ego rents of local parties are high; a...

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Veröffentlicht in:Regional science and urban economics 2020-03, Vol.81, p.103505, Article 103505
Hauptverfasser: Alderighi, Marco, Feder, Christophe
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description We establish a link between the best system of government and the strength of inter-state spillovers within a model of political competition with self-interested parties. We show the superiority of the unitary system when: inter-state spillovers are strong; the ego rents of local parties are high; and the system of government is chosen under a veil of ignorance. •We study unitary vs federal systems within a model of political competition.•Parties face a trade-off between their power and winning the election.•The unitary system is better if interstate spillovers and local ego rents are high.•The unitary system is better in the worst-case scenario.•Excessive (de)centralization leads to larger losses if spillovers are (weak) strong.
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source Elsevier ScienceDirect Journals
subjects Allocation of power
Ego
Federalism
Government
Ignorance
Institutional design
Politics
Public administration
Rents
Self-interested politicians
Voting
title Institutional design, political competition and spillovers
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