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Working paper

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2010

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cc-by-nc-nd, (c) Aidt et al., 2011
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/116655

Fiscal federalism and electoral accountability

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Abstract

We study the efficient allocation of spending and taxation authority in a federation in which federal politicians are exposed to electoral uncertainty. We show that centralization may, but need not, result in a loss of electoral accountability. We identify an important asymmetry between positive and negative externalities and show that centralization may not be efficient in economies with positive externalities even when regions are identical and centralization does not entail a loss of accountability. We also show that decentralization can only Pareto dominate centralization in economies with negative externalities.

Subject

Federalisme, Dret fiscal, Béns públics, Eleccions

Subject (English)

Federalism, Tax law, Public goods, Elections

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IEB (Institut d’Economia de Barcelona) – Working Papers

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AIDT, Toke and DUTTA, Jayasri. Fiscal federalism and electoral accountability. IEB Working Paper 2010/11. [consulted: 17 of June of 2026]. Available at: https://hdl.handle.net/2445/116655

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