This paper considers a simple dynamic decentralized leadership model with local borrowing and regional productivity enhancing investment. The central government is benevolent but cannot commit. The local governments strategically act while accounting for the ex post motive of the central...

This paper considers a simple dynamic decentralized leadership model with local borrowing and regional productivity-enhancing investment. In this model, the central government is benevolent but cannot commit to ex post intergovernmental transfer policies, while local governments act...

The long-term care facility service cost suddenly increases since the start of the nursing-care insurance system and will be increasing with the advancing aging in future. The cared periods are prolonged as the average life span of the elderly person lengthens. The family function is weakening...

This paper analyzes the managerial performance of domestic airport terminal buildings in Japan. Japanese airports have been constructed all over the country under the Special Account for Airport Development but few are profitable. Public-private partnership third party companies manage most...

We examine the welfare effects of a central government's subsidy for a local public good in a Nash equilibrium model with two types of public goods. We first show that the welfare effect depends on the substitution and evaluation effects. We also investigate the optimal subsidy rate in a...

There is a growing body of literature on the commitment problem of interregional transfers. The problem occurs because of an ex post bailout by a central government leading to ex ante adverse incentive consequences for a local government. However, different models have yielded different economic...

In his seminal work on fiscal federalism, Oates (1972) addressed the socalled Decentralization Theorem, which states that, if such factors as scale economies and spillovers are left out of consideration, a decentralized system is always more efficient than a centralized system for the supply of...

Frequent revision of firms' actions facilitates to sustain tacit collusion. Even when some, not all, firms revise their actions with enhanced frequency, the change contributes positively to collusive sustainability, i.e., lowering the critical discount factor. In this sense, the added frequency...

A possible rationale for institutional conservatism, i.e., reluctance to adjust actions in accordance with external environmental changes, may be found in the payoff stabilisation effect it strategically affords. Suppose, for example, that one of the duopolists is capable of adjusting its...