We examine a symmetric two-district setting with spillovers of local public spending where a spill-in from the foreign spending is not a substitute, but a complement to domestic spending. Specifically, we assume production of two district-specific public goods out of two complementary...

This papers reviews main topics concerning sub-national revenues (intergovernmental transfers and taxes) and discusses some policy options to develop own sub-national revenues. The review covers the political-legal framework and the fiscal outcomes, finding that: i) intergovernmental transfers...

While gerrymandering in developing countries is often pushed by local authorities to secure political advantages, fiscal grants systems under decentralization may also have result in the same. We investigate this issue to identify the correlates of the growth in the number of cities in the...

Fiscal decentralization and intergovernmental fiscal relations reform have become nearly ubiquitous in developing countries. Performance, however, has often been disappointing in terms of both policy formulation and outcomes. The dynamics underlying these results have been poorly researched....

Governments do not have perfect information regarding constituent priorities and needs. This lack of knowledge opens the door for groups to lobby in order to affect the government’s taxation levels. We examine the political economy of decentralized revenue-raising authority in light of social...

The aim of the paper is to analyze a model of local public good provision with positive interjurisdictional spillovers comparing decentralized and centralized system. As in the recent Second Generation Theory (SGT) of fiscal federalism (Seabright 1996; Lockwood 2002, 2006; Besley and Coate 2003; Weingast...

The paper provides empirical analysis of the relationship between fiscal decentralisation and the quality of public services in the Russian regions. The analysis suggests that fiscal decentralisation has no significant effect on the key inputs into secondary education, such as schools,...

We examine a symmetric two-district setting with spillovers of local public spending where a spill-in from the foreign spending is not a substitute, but a complement to domestic spending. Specifically, we assume production of two district-specific public goods out of two complementary...

We can enhance development by making it easier for people to “vote with their feet” between jurisdictions. Few, if any, policy reforms can achieve such enormous increases in economic growth and opportunity. Foot voting is, in several crucial respects, a better mechanism of political...

This article revisits government failure theory by examining the relationship between government decentralization and the size of the nonprofit sector (NPS). Government failure theory posits that nonprofits are most active in regions where the largest gap exists between the homogeneous supply of...