The advantages and disadvantages of public sector decentralization are widely discussed in economics and political science. Some authors argue that decentralization leads to an optimal provision of public services and promotes economic growth, while others emphasize the dangers of competition...

This paper studies the efficiency of decentralized leadership in federations where selfish regional governments provide regional and federal public goods and the benevolent central government implements interregional earmarked and income transfers. Without residential mobility, unlimited...

This paper analyzes the lack of civic engagement in local government decision-making and the problems that result from it. I consider one explanation as viewed through public choice theory: dominant special interest groups capture local governments for their own private interests. Thus, average...

The advantages and disadvantages of public sector decentralization are widely discussed in economics and political science. Some authors argue that decentralization leads to an optimal provision of public services and promotes economic growth, while others emphasize the dangers of competition...

This study analyses the extent of fiscal risk sharing and redistribution for Austria from 2000 to 2019. Overall, fiscal policy smooths about one tenth of regional GDP shocks. While this is primarily driven by the federal budget and social security funds, there is also a significant contribution...

States use local-option taxes to promote local revenue diversification and improve local fiscal health. However, many sub-state governments wait a long time before adopting local-option taxes or do not adopt them at all, which seems puzzling or even irrational upon first glance. This paper uses...

We study the fiscal policy reactions of municipalities in the German state of North Rhine-Westphalia to an unanticipated spending shock. The implementation of a horizontal transfer system led to additional contributions for selected municipalities. Using the quasi-random assignment, we examine...

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...

Despite its apparent advantages, devolution of fiscal responsibilities has not proceeded evenly over the past two decades. Decentralisation can strengthen the democratic process, allow governments to tailor the supply of public goods to local preferences and introduce some competition across...

In the past year, local governments have made a foray into the hotly debated arena of immigration law and policy by adopting laws to address illegal immigration in their respective jurisdictions. Courts have struck down many of these laws on the grounds that they are preempted pursuant to a...