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Optimal size of central government and agglomeration

Author

Listed:
  • Akiyoshi Furukawa

    (Department of Economics, Chukyo University)

Abstract

Though the central government uses neither a transfer nor a regional allocation policy, it can affect the distribution of the population. This paper analyzes the optimal government policy and examines whether or not the government should take into account agglomeration without a regional redistribution policy. The optimal size of central government depends on the degree of increasing returns in the private and the public sector. When the central government shows a much lower degree of increasing returns in contrast to the private sector, it should decrease the provision of the public good. As a result, the central government limits agglomeration. If the central government does not consider its effect on agglomeration, it is too large in size, and it causes too much agglomeration.

Suggested Citation

  • Akiyoshi Furukawa, 2010. "Optimal size of central government and agglomeration," Economics Bulletin, AccessEcon, vol. 30(2), pages 940-947.
    • Handle: RePEc:ebl:ecbull:eb-09-00733
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    File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I2-P87.pdf
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    Cited by:

    1. Francesca Bartolacci & Rosanna Salvia & Giovanni Quaranta & Luca Salvati, 2022. "Seeking the Optimal Dimension of Local Administrative Units: A Reflection on Urban Concentration and Changes in Municipal Size," Sustainability, MDPI, vol. 14(22), pages 1-17, November.

    More about this item

    Keywords

    Agglomeration; Central government; Regional distribution;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • H4 - Public Economics - - Publicly Provided Goods

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