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Fiscal centralization and the political process

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dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorAlbornoz, Facundo
dc.contributor.authorCabrales, Antonio
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economía
dc.date.accessioned2010-01-28T13:40:58Z
dc.date.available2010-01-28T13:40:58Z
dc.date.issued2010-01
dc.description.abstractWe study the dynamic support for fiscal decentralization in a political agency model from the perspective of a region. We show that corruption opportunities are lower under centralization at each period of time. However, centralization makes more difficult for citizens to detect corrupt incumbents. Thus, corruption is easier under centralization for low levels of political competition. We show that the relative advantage of centralization depends negatively on the quality of the local political class, but it is greater if the center and the region are subject to similar government productivity shocks. When we endogenize the quality of local politicians, we establish a positive link between the development of the private sector and the support for decentralization. Since political support to centralization evolves over time, driven either by economic/political development or by exogenous changes in preferences over public good consumption, it is possible that voters are (rationally) discontent about it. Also, preferences of voters and the politicians about centralization can diverge when political competition is weak.
dc.format.mimetypeapplication/pdf
dc.identifier.issn2340-5031
dc.identifier.repecwe100402
dc.identifier.urihttps://hdl.handle.net/10016/6673
dc.language.isoeng
dc.relation.ispartofseriesUC3M Working papers. Economics
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.subject.ecienciaEconomía
dc.subject.jelH11
dc.subject.jelD72
dc.subject.jelD73
dc.subject.jelP16
dc.subject.otherDecentralization
dc.subject.otherCentralization
dc.subject.otherPolitical agency
dc.subject.otherQuality of politicians
dc.subject.otherCorruption
dc.titleFiscal centralization and the political process
dc.typeworking paper*
dspace.entity.typePublication
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