Bulletin n. 3/2007
December 2007
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Kangoh Lee
    Voluntary contributions and local public goods in a federation
    in Journal of Urban Economics , Volume 63, Issue 1 ,  2008 ,  163-176
    This paper considers nonneutral effects of government spending in a federation of multiple jurisdictions. Both government spending and private donations finance local public goods, redistributive programs, that provide transfers for the poor. In the standard model, government spending has no effect on the public goods, as donors reduce their donations one for one in response to an increase in government spending. In a federation, donors of a jurisdiction donate, through federal charities, to help the poor in the jurisdiction and the poor in other jurisdictions as well. Jurisdictions are thus linked through donations. Such linkage influences donors' behavior beyond the traditional crowding-out effect. As a result, government spending has nonneutral effects on the level of public goods.
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