Bulletin n. 2/2011
October 2011
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
    • Randall G. Holcombe, DeEdgra W. Williams
    The cartelization of local governments
    in Public Choice , Volume 149, Numbers 1-2 ,  2011 ,  65-74
    Intergovernmental competition can enhance efficiency. Centralization of government expenditures inhibits intergovernmental competition because it makes governments more homogeneous, and so cartelizes local governments. Cartelization reduces Tiebout competition, and limits benchmark competition in which one government’s performance can be compared with neighboring governments. Measuring fiscal centralization as the ratio of local to state and local government expenditures within the state, the evidence shows that more fiscal decentralization is associated with higher levels of state per capita income. Cartelization of local governments negatively impacts income.
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