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Institutional design, political competition and spillovers

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  • Alderighi, Marco
  • Feder, Christophe

Abstract

We establish a link between the best system of government and the strength of inter-state spillovers within a model of political competition with self-interested parties. We show the superiority of the unitary system when: inter-state spillovers are strong; the ego rents of local parties are high; and the system of government is chosen under a veil of ignorance.

Suggested Citation

  • Alderighi, Marco & Feder, Christophe, 2020. "Institutional design, political competition and spillovers," Regional Science and Urban Economics, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:regeco:v:81:y:2020:i:c:s0166046218302308
    DOI: 10.1016/j.regsciurbeco.2019.103505
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    More about this item

    Keywords

    Institutional design; Voting; Self-interested politicians; Allocation of power; Federalism;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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