1. Editorial Board
Pages CO2
2. Editorial introduction for “The Political Integration and Disintegration” special issue
Pages 1155-1156
Boadway, Robin, Thisse, Jacques and Weber, Shlomo
3. Why countries are fiscally decentralizing
Pages 1157-1189
Arzaghi, Mohammad and Henderson, J. Vernon
This paper models and empirically investigates underlying forces that promote governmental decentralization, or effective federalism, in the world over the last 25 years. A move to a federal system is based on the demand by hinterland regions for local autonomy, which increases with national income growth, greater relative hinterland population, and increasing national population. It is influenced as well by the degree of democratization nationally and...
4. How to win a decision in a confederation
Pages 1191-1210
Jehiel, Philippe and Thisse, Jacques-Fran?ois
This paper deals with collective decision making within a group of independent states. The right to choose the public policy is delegated from the central authority to one of the states through a bidding procedure among the group state members. We identify the following tradeoff: competition among states yields higher transfers to the central authority, but the outcome tends to be less efficient than what it is when states negotiate prior to the decision...
5. Decentralization and international tax competition
Pages 1211-1229
Wilson, John Douglas and Janeba, Eckhard
This paper models tax competition between two countries that are divided into regions. In the first stage of the game, the strategy variable for each country is the division of a continuum of public goods between central and regional government provision. In the second stage, the central and regional governments choose their tax rates on capital. A country's decentralization level serves as a strategic tool through its influence on the mix of horizontal and...
6. Can decentralization be beneficial?
Pages 1231-1249
Rubinchik-Pessach, Anna
A conventional justification for government hierarchy in the fiscal federalism literature is based upon asymmetry in policy tools or in information access that is available to different levels of government. This paper demonstrates that even if these asymmetries are eliminated, addition of local (regional) governments to a one-tier central government can be strictly welfare improving. ...
7. Mixed markets and crime
Pages 1251-1275
Helsley, Robert W. and Strange, William C.
This paper specifies and solves a two-stage, game theoretic model of a mixed market for crime control. In the first stage of the model, private targets and the government choose levels of policing. In the second stage, criminals choose targets and the severity of the crimes that they commit. The paper's key results are as follows. First, private policing can both divert crime to targets that lack private protection and also increase the severity of...
8. Transfers in a polarized country: bridging the gap between efficiency and stability
Pages 1277-1303
Haimanko, Ori, Le Breton, Michel and Weber, Shlomo
We consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession. The country is efficient if its breakup into smaller countries leads to an aggregate utility loss. We show that in an efficient country whose citizens' preferences exhibit a high degree of polarization, a threat of secession cannot be eliminated without inter-regional transfers. We also...
9. Redistribution policy: A European model
Pages 1305-1331
Casella, Alessandra
Following the rationale for regional redistribution programs described in the official documents of the European Union, this paper studies a simple multicountry model built around two regions: a core and a periphery. Technological spillovers link firms' productivity within each of the two regions, and each country's territory falls partly in the core and partly in the periphery, but the exact shares vary across countries. In line with the official view of the...
10. War, peace, and the size of countries
Pages 1333-1354
Alesina, Alberto and Spolaore, Enrico
This paper studies the relationship between international conflict and the size distribution of countries in a model in which both peaceful bargaining and nonpeaceful confrontations are possible. We show how the size distribution of countries depends on the likelihood, benefits, and costs of conflict and war. We also study the role of international law and show how better defined international ‘property rights’ may lead to country breakup and more numerous...
