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Decentralized Leadership

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  • Emilson C.D. Silva

Abstract

This paper studies the efficiency of decentralized leadership in federations where selfish regional governments provide regional and federal public goods and the benevolent central government implements interregional earmarked and income transfers. Without residential mobility, unlimited decentralized leadership is efficient only if the center implements redistributive interregional income and earmarked transfers to equate consumption of private and regional public goods across regions. Such policies perfectly align the incentives of the selfish regional governments. With imperfect residential mobility, decentralized leadership is efficient if the center adopts redistributive interregional income and earmarked policies and there is a common labor market in the federation.

Suggested Citation

  • Emilson C.D. Silva, 2016. "Decentralized Leadership," CESifo Working Paper Series 6064, CESifo.
    • Handle: RePEc:ces:ceswps:_6064
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp6064.pdf
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    References listed on IDEAS

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    1. Richard Cornes & Jun-ichi Itaya & Aiko Tanaka, 2012. "Private provision of public goods between families," Journal of Population Economics, Springer;European Society for Population Economics, vol. 25(4), pages 1451-1480, October.
    2. Vander Lucas & Emilson Silva, 2016. "Common Labor Market, Attachment And Spillovers In A Large Federation," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 065, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    3. Gary S. Becker, 1981. "A Treatise on the Family," NBER Books, National Bureau of Economic Research, Inc, number beck81-1, June.
    4. Richard Cornes, 1993. "Dyke Maintenance and Other Stories: Some Neglected Types of Public Goods," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(1), pages 259-271.
    5. Emilson Silva, 2015. "Efficient earmarking under decentralized fiscal commitments," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(4), pages 683-701, August.
    6. Emilson Caputo Delfino Silva & Vander Mendes Lucas, 2016. "Common labor market, attachment and spillovers in a large metropolis," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(4), pages 693-715, August.
    7. Richard C. Cornes & Emilson C. D. Silva, 1999. "Rotten Kids, Purity, and Perfection," Journal of Political Economy, University of Chicago Press, vol. 107(5), pages 1034-1040, October.
    8. Cornes, Richard & Hartley, Roger, 2007. "Weak links, good shots and other public good games: Building on BBV," Journal of Public Economics, Elsevier, vol. 91(9), pages 1684-1707, September.
    9. Silva, Emilson Caputo Delfino, 2014. "Selective decentralized leadership," Journal of Urban Economics, Elsevier, vol. 83(C), pages 1-5.
    10. Richard Cornes & Jun‐Ichi Itaya, 2010. "On the Private Provision of Two or More Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(2), pages 363-385, April.
    11. Caplan, Arthur J. & Cornes, Richard C. & Silva, Emilson C. D., 2000. "Pure public goods and income redistribution in a federation with decentralized leadership and imperfect labor mobility," Journal of Public Economics, Elsevier, vol. 77(2), pages 265-284, August.
    12. Bergstrom, Theodore C, 1989. "A Fresh Look at the Rotten Kid Theorem--and Other Household Mysteries," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1138-1159, October.
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    2. Tran, Thomas T.D. & Smith, Amanda D., 2017. "fEvaluation of renewable energy technologies and their potential for technical integration and cost-effective use within the U.S. energy sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 1372-1388.

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    More about this item

    Keywords

    decentralized leadership; earmarked transfers; common labor market; rotten kids;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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