Information transmission within federal fiscal architectures theory and evidence by Axel Dreher ... [et al.]
Contributor(s): Dreher, Axel
.
Material type: 
ArticleSubject(s): FEDERALISMO FISCAL | INTERCAMBIO DE INFORMACION TRIBUTARIAOnline resources: Click here to access online
In:
Oxford Economic Papers v. 70, n. 1, January 2018, p. 243-265Summary: This paper explores the role of information transmission and misaligned interests across levels of governments in explaining variation in the degree of decentralization across countries. We analyse two alternative policy-decision schemes— ‘decentralization’ and ‘centralization’— within a two-sided incomplete information principal–agent framework. The quality of communication depends on the conflict of interests between the government levels and on which government level controls
the degree of decentralization. We show that the extent of misaligned interests and the relative importance of local and central government knowledge affect the optimal
choice of policy-decision schemes. Our empirical analysis confirms that countries’ choices depend on the relative importance of private information. In line with our theory the results differ significantly between unitary and federal countries.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 286/2018/1-3 (Browse shelf) | Available | OP 286/2018/1-3 |
Disponible en formato electrónico a través de la Biblioteca del IEF.
Resumen.
Bibliografía.
This paper explores the role of information transmission and misaligned interests across levels of governments in explaining variation in the degree of decentralization across countries. We analyse two alternative policy-decision schemes— ‘decentralization’ and ‘centralization’— within a two-sided incomplete information principal–agent framework. The quality of communication depends on the conflict of interests between the government levels and on which government level controls
the degree of decentralization. We show that the extent of misaligned interests and the relative importance of local and central government knowledge affect the optimal
choice of policy-decision schemes. Our empirical analysis confirms that countries’ choices depend on the relative importance of private information. In line with our theory the results differ significantly between unitary and federal countries.
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