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Information acquisition, political game and the delegation of authority

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  • Laffont, Jean-Jacques
  • Zantman, Wilfried

Abstract

In this paper, we investigate the problem of decentralizing public good decision-making from a political and informational perspective. First, we explain why different levels of jurisdiction, central decision-maker and local ones, are likely to take their decisions under different informational structures by deriving the incentives of both potential decision-makers to look for the relevant pieces of information. By endogenizing the informational structures, we identify a trade-off in the choice between centralization and decentralization. It amounts to choosing between a costly information technology allowing to take optimal decisions and a free information technology subject to several distortionary influences.
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Suggested Citation

  • Laffont, Jean-Jacques & Zantman, Wilfried, 2002. "Information acquisition, political game and the delegation of authority," European Journal of Political Economy, Elsevier, vol. 18(3), pages 407-428, September.
    • Handle: RePEc:eee:poleco:v:18:y:2002:i:3:p:407-428
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    References listed on IDEAS

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    1. Green, Jerry & Laffont, Jean-Jacques, 1977. "Characterization of Satisfactory Mechanisms for the Revelation of Preferences for Public Goods," Econometrica, Econometric Society, vol. 45(2), pages 427-438, March.
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    Cited by:

    1. Alexander Wagner, 2011. "Loyalty and competence in public agencies," Public Choice, Springer, vol. 146(1), pages 145-162, January.
    2. Laffont, Jean-Jacques & Pouyet, Jerome, 2004. "The subsidiarity bias in regulation," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 255-283, January.
    3. Breuille, Marie-Laure & Gary-Bobo, Robert J., 2007. "Sharing budgetary austerity under free mobility and asymmetric information: An optimal regulation approach to fiscal federalism," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1177-1196, June.
    4. Claude Ménard & Gaetano Martino & Gustavo Magalhães de Oliveira & Annie Royer & Maria Sylvia Macchione Saes & Paula Sarita Bigio Schnaider, 2022. "Governing food safety through meso‐institutions: A cross‐country analysis of the dairy sector," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(4), pages 1722-1741, December.
    5. Jose Ripoll, 2003. "National Appointments to Multinational Monetary Policy Making: A Role Conflict?," Macroeconomics 0301009, University Library of Munich, Germany.
    6. Morasch, Karl, 2003. "Deciding about (de-)centralization of industrial policy: Delegation by a central authority vs. bargaining of regional governments," Working Papers in Economics 2003,3, Bundeswehr University Munich, Economic Research Group.
    7. Cécile Aubert & Jean-Jacques Laffont & Pablo Serra & Diego Bondorevsky & Diego Petrecolla & Alfredo García & Paulina Beato & David Wood & Richard Tomiak & Jaime Millán & Carmen Fuente & Salomé Cisnal , 2002. "Competition Policy in Regulated Industries: Approaches for Emerging Economies," IDB Publications (Books), Inter-American Development Bank, number 42038 edited by Paulina Beato & Jean-Jacques Laffont, February.

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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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