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Fiscal Decentralization: A Political Economy Perspective

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  • Lockwood, Ben
Abstract
This paper surveys recent contributions to the study of fiscal decentralization which adopt a political economy approach. It is argued that this approach can capture, in a variety of formal models, the plausible and influential ideas (increasingly, supported by empirical evidence) that fiscal decentralization can lead to improved preference-matching and accountability of government. In particular, recent work on centralized provision of public good provision via bargaining in a legislature shows how centralization reduces preference-matching, and recent work using "electoral agency" models formalizes the accountability argument. These models also provide insights into when decentralization may fail to deliver these benefits.

Suggested Citation

  • Lockwood, Ben, 2005. "Fiscal Decentralization: A Political Economy Perspective," Economic Research Papers 269615, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269615
    DOI: 10.22004/ag.econ.269615
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    More about this item

    Keywords

    Political Economy; Public Economics;

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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