Local agency costs of political centralization

• 成果类型: Article
• 署名作者: Myerson, Roger B.
• 署名单位: University of Chicago
• 刊物名称: THEORETICAL ECONOMICS
• ISSN/ISSBN: 1933-6837
• DOI: 10.3982/TE3763
• 发表日期: 2021-05-01
• 页码: 425-448
• 关键词: Local public goods; moral hazard; decentralized democracy; centralized autocracy; D72; H41; H70

摘要

We analyze a model of moral hazard in local public services, which could be efficiently managed by officials under local democratic accountability, but not by officials who are appointed by the ruler of a centralized autocracy. The ruler might prefer to retain an official who diverted resources from public services but contributed part to benefit the ruler. The autocratic ruler would value better public services only when residents reduce taxable investments, which become unprofitable without good public services. For local government to benefit local residents, they must have some decentralized power to punish an official who serves them badly even while serving the ruler well.