Using a Principal-Agent framework, this paper analyzes a public good provision problem in which a central government tries to favor one of the regions or political reasons. We show how this favoritism leads the government to distort the allocation scheme compared to the benevolent case. We then...

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...