This paper revisits the fiscal quot;decentralization theoremquot;, by relaxing the role of the assumption that … voting, (i) 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 …

This paper integrates the distributive politics literature with the literature on decentralization by incorporating … externality. The welfare benefits of decentralization, and the performance of "constitutional rules" (such as majority voting …) which may be used to choose between decentralization and centralization, are then discussed in this framework …

A recent trend in decentralization in several large and diverse countries is the creation of local jurisdictions below … both regional and national governments. This paper argues that such grants-financed decentralization enables politicians to … target benefits to pivotal voters and organized interest groups in exchange for political support. Decentralization, in this …