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The Impact of Referendums on the Centralization of Public Goods Provision: A Political Economy Approach

  • The paper compares decision-making on the centralisation of public goods provision in the presence of regional externalities under representative and direct democratic institutions. A model with two regions, two public goods and regional spillovers is developed in which uncertainty over the true preferences of candidates makes strategic delegation impossible. Instead, it is shown that the existence of rent extraction by delegates alone suffices to make cooperative centralisation more likely through representative democracy. In the non-cooperative case, the more extensive possibilities for institutional design under representative democracy increase the likelihood of centralisation. Direct democracy may thus be interpreted as a federalism-preserving institution.

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Metadaten
Author: Jan SchnellenbachORCiD, Lars P. Feld, Christoph A. Schaltegger
DOI:https://doi.org/10.1007/s10101-009-0063-1
ISSN:1435-8131
Title of the source (English):Economics of Governance
Document Type:Scientific journal article peer-reviewed
Language:English
Year of publication:2010
Tag:Centralisation; Direct democracy; Public good provision; Representative democracy
Volume/Year:11
Issue number:1
First Page:3
Last Page:26
Faculty/Chair:Fakultät 5 Wirtschaft, Recht und Gesellschaft / FG VWL, insbesondere Mikroökonomik
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