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The hierarchy of public governance: resource allocation versus bureaucratic inefficiency

Author

Listed:
  • Susheng Wang

    (Shanghai University
    Hong Kong University of Science and Technology)

  • Jun Xiao

    (University of Melbourne)

Abstract

Should a social program be run at a higher or lower level of government? We consider a government-run program supplying a private good to consumers. We focus on a tradeoff between the advantage of a high level of government in resource allocation and its disadvantage in consumer information. We look into the effect of differences in income levels, marginal costs, and preferences on the organization of public governance. One general conclusion is that when regional differences are large, the central government should be in charge; otherwise, local governments should be in charge.

Suggested Citation

  • Susheng Wang & Jun Xiao, 2024. "The hierarchy of public governance: resource allocation versus bureaucratic inefficiency," Review of Economic Design, Springer;Society for Economic Design, vol. 28(2), pages 391-434, June.
    • Handle: RePEc:spr:reecde:v:28:y:2024:i:2:d:10.1007_s10058-023-00344-8
    DOI: 10.1007/s10058-023-00344-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Public governance; Government hierarchy; Resource allocation; Bureaucratic inefficiency;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • H4 - Public Economics - - Publicly Provided Goods
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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