Does endogenous formation of jurisdictions lead to wealth-stratification?

• 成果类型: Article
• 署名作者: Gravel, Nicolas; Thoron, Sylvie
• 署名单位: Universite de Toulon
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2005.08.002
• 发表日期: 2007
• 页码: 569-583
• 关键词: jurisdictions; Local public goods; taxes; wealth-stratification; STABILITY

摘要

Conditions under which endogenous processes of jurisdiction formation entail wealth-stratification are examined in a model where unequally wealthy households with identical preferences form jurisdictions in order to produce a public good financed by proportional taxation. We define a stable jurisdiction structure to be a partition of the households into jurisdictions that is immune to individual deviations. We define a jurisdiction structure to be wealth-stratified when each jurisdiction is composed of households who form an interval with respect to the ordering of their wealth. We show that a necessary and sufficient condition for the stratification of any stable jurisdiction structure is for the individual preferences for the public and the private good to exhibit a relation of gross substitutability/complementarity between the public good and the private good that is independent from prices and wealth. (c) 2005 Elsevier Inc. All rights reserved.