Lockwood, Ben - Department of Economics, European University Institute - 2007
This paper revisits the fiscal "decentralization theorem", by relaxing the role of the assumption that governments are …) centralization can welfare-dominate decentralization even if there are no externalities and regions are heterogenous; (ii …) decentralization can welfare-dominate centralization even if there are positive externalities and regions are homogenous. The intuition …