This paper puts forward a framework for evaluating the effects of governmental decentralization on the shadow economy and corruption. The theoretical analysis demonstrates that decentralization exerts both a direct and an indirect impact on the shadow economy and corruption. Firstly,...

Manipulation of government finances for the benefit of narrowly defined groups is usually thought to be limited to the part of the budget over which politicians exercise discretion in the short run, such as earmarks. Analyzing a revenue-sharing program between the central and local governments...

In 2005 Russian Federation moved from the elections of the regional governor to their appointment by the federal center. The study analyzes the possible changes in the regional governments fiscal policy due to the change of the preferences aggregation mechanism at the regional level. It includes...

Over the past 50 years, an increasing amount of political authority has been delegated to the regional government level in Europe. This paper analyses regional demands for involvement in policy-making by focusing on the preferences of top-level regional civil servants (“regio-crats”). A...

One of the fundamental tenets of fiscal federalism is that, absent various sorts of externalities, decentralized governments that rely on own-source revenues should be more fiscally efficient than decentralized governments that rely on grant financing. The argument relies in part on the idea...

In this paper we investigate the role of judicial control of lobbying activities in an endogenous policy framework, focusing on two dimensions of quality of the judiciary, namely efficiency and integrity. We present a multi-layer lobbying model where a self-interested group is allowed to inuence...

The paper studies the effect of additional government revenues on political corruption and on the quality of politicians, both with theory and data. The theory is based on a version of the career concerns model of political agency with endogenous entry of political candidates. The evidence...

A large proportion of greenhouse gas emissions is produced in urban areas. Therefore, local mitigation policies have to play an important role in any effective global climate protection strategy. Based upon a literature review, this article gives an overview of drivers and barriers for local...

This paper studies the relationship between fiscal decentralization and electoral accountability, by analyzing how decentralization impacts upon incentive and selection effects, and thus on voter welfare. The effect of fiscal centralization on voter welfare works through two channels: (i) via...

We address the impact of corruption in a developing economy in the context of an empirically relevant hold-up problem - when a foreign firm sinks an investment to provide infrastructure services. We focus on the structure of the economy’s bureaucracy, which can be centralized or decentralized,...