We develop a model of Tiebout sorting based on decentralized income taxation, which allows for spillovers and imperfect rivalry in consumption of the publicly provided good. We identify three sources of welfare loss from decentralization: Imperfect redistribution, inter-jurisdictional...

Preferences about the vertical distribution of power in federal systems are not well understood. I argue that negative historical experiences with higher-level governments can plausibly raise demands for exit strategies and a devolution of power. But integration, for instance delegating power...

This paper empirically investigates the underlying determinants of expenditure decentralization, based on the predictions of a new political economy model of partial decentralization. The analysis is based on an agency model, in which two levels of government are involved in the provision of a...

The recent uprisings in the Middle East have cast doubt on the degree to which existing theories of autocracy can correctly identify which groups threaten the autocrats rule at any given time. As a result, these theories are unable to predict fundamental upheavals in established autocracies. Who...

The literature on trade liberalization and environment has not considered federal structures. This paper shows how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes regardless of...

The literature on trade liberalization and environment has not considered federal structures. This paper shows how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes regardless of...

According to the data released by the Federal Treasury, at month-end January 2016 the federal budget revenue came to 20.6% of GDP down 5.3 p.p. of GDP against the first month of the previous year. In January 2016 against January 2015, contraction of the federal budget expenditure constituted...

In this paper we introduce the stability threshold that quantifies the minimal returns to size sufficient to prevent credible secession threats by regions of the country. Severity of internal tension has been linked to degree of polarization of citizens' preferences and characteristics. We show...

In response to recessions beginning in 1975, 2001, and 2007, the federal government provided financial aid to states with the dual goals of stabilizing state finances and stimulating the economy. The timing of fund provision and the ultimate allocation of funds were often less than optimal. The...