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Decentralization, Competition and the Efficiency of Federalism

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  • ALAN P. HAMLIN

Abstract

Arguments for the efficiency of federalism typically depend on a decentralization thesis and a competition thesis, both of which relate to mobility. In this essay I shall review and appraise these two lines of argument I shall suggest that the decentralization thesis is best seen, not as an argument for the efficiency of federalism, but as an efficiency criterion against which models of federalism may be evaluated By contrast, competition and mobility are aspects of the procedural mechanism of federalism which must be supplemented by explicit models of the political process.

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  • Alan P. Hamlin, 1991. "Decentralization, Competition and the Efficiency of Federalism," The Economic Record, The Economic Society of Australia, vol. 67(3), pages 193-204, September.
    • Handle: RePEc:bla:ecorec:v:67:y:1991:i:3:p:193-204
    DOI: 10.1111/j.1475-4932.1991.tb02546.x
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    References listed on IDEAS

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    1. Buchanan, James M. & Goetz, Charles J., 1972. "Efficiency limits of fiscal mobility: An assessment of the tiebout model," Journal of Public Economics, Elsevier, vol. 1(1), pages 25-43, April.
    2. A. Hamlin, 1984. "Constitutional control of processes and their outcomes," Public Choice, Springer, vol. 42(2), pages 133-145, January.
    3. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    4. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922, September.
    5. Wheaton, William C., 1975. "Consumer mobility and community tax bases : The financing of local public goods," Journal of Public Economics, Elsevier, vol. 4(4), pages 377-384, November.
    6. Wallace E. Oates, 1968. "The Theory of Public Finance in a Federal System," Canadian Journal of Economics, Canadian Economics Association, vol. 1(1), pages 37-54, February.
    7. N. Gregory Mankiw & Michael D. Whinston, 1986. "Free Entry and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 48-58, Spring.
    8. Alan P. Hamlin, 1985. "Federalism, Horizontal Equity, and the Optimal Grant," Public Finance Review, , vol. 13(2), pages 115-131, April.
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    Cited by:

    1. Chen, Shaoling & Gao, Qing & Peng, Qing & Yang, Haisheng, 2021. "Government-decentralized power: Measurement and effects," Emerging Markets Review, Elsevier, vol. 48(C).
    2. Geoffrey Brennan & Alan Hamlin, 1994. "A Revisionist View of the Separation of Powers," Journal of Theoretical Politics, , vol. 6(3), pages 345-368, July.
    3. Fabella, R.V., 2005. "A Nozick-Buchanan contractarian governance as solution to some Invisible Hand failures," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 284-295, May.
    4. Seabright, Paul, 1996. "Accountability and decentralisation in government: An incomplete contracts model," European Economic Review, Elsevier, vol. 40(1), pages 61-89, January.
    5. Graham Brownlow, 2017. "Practice running ahead of theory? Political economy and the economic lessons of UK devolution," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 10(3), pages 559-573.

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