The paper analyzes the optimal level of decentralization in local-public-good provision. Although all voters pay for such investments, only a subset benefit from them; their rate of return, however, is positive.Through pork-barrel projects,which do not increase welfare, any resource allocation is realizable. Candidates competing in local and national elections therefore face a trade-off between targetability and efficiency, which causes some profitable projects to be discarded. Decentralization affects underinvestment because the share of the electorate who benefit from an investment and the share of total budget absorbed by its costs depend on the size of that electorate

Electoral Competition, Decentralization and Public Investment Underprovision / Magnani, Marco. - In: JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS. - ISSN 0932-4569. - 166:(2010), pp. 321-343.

Electoral Competition, Decentralization and Public Investment Underprovision

MAGNANI, Marco
2010-01-01

Abstract

The paper analyzes the optimal level of decentralization in local-public-good provision. Although all voters pay for such investments, only a subset benefit from them; their rate of return, however, is positive.Through pork-barrel projects,which do not increase welfare, any resource allocation is realizable. Candidates competing in local and national elections therefore face a trade-off between targetability and efficiency, which causes some profitable projects to be discarded. Decentralization affects underinvestment because the share of the electorate who benefit from an investment and the share of total budget absorbed by its costs depend on the size of that electorate
2010
Electoral Competition, Decentralization and Public Investment Underprovision / Magnani, Marco. - In: JOURNAL OF INSTITUTIONAL AND THEORETICAL ECONOMICS. - ISSN 0932-4569. - 166:(2010), pp. 321-343.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11381/2309151
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